City likely to label depot site blighted

A bill passed in the Nebraska legislature last year will make it possible for old defense sites such as Sioux Army Depot to be improved with redevelopment projects.

At last week’s city council meeting Sidney took the first steps toward a substandard and blighted designation for Sioux Army Depot in order to make projects at the site eligible for this sort of project funding.

“We’ve worked with the legislature for years to get them to understand the special circumstances and the challenges that we have with a major part of our community northwest of town as a former military installation and the substandard and blighted conditions for developers to try to turn that into useful properties,” city manager Gary Person told the planning commission last week. “Most of the infrastructure is 70 years old, the buildings are aging, the infrastructure’s aging.”

An economic development team consisting of members from both the city and county worked with state Sen. Ken Schilz to find an economic development plan that would facilitate development at old military bases.

These properties have potential, but the aging structures and infrastructure deter investors.

In 2013 the legislature approved LB66 which allows first class cities to designate former military bases outside city limits as substandard and blighted and therefore eligible for redevelopment projects that use tax increment financing. TIF utilizes the expected future increase in property taxes that result from higher valuations after a project is finished to repay public costs associated with the project. These costs could include things such as streets, water, sewer and parking lots.

In the past, only areas within municipal borders were eligible for TIF. A first class city like Sidney with a population of 5,000 or more can only declare 35 percent of the area within its municipal borders as substandard and blighted.

In the Nebraska legislature’s 2014 session, the legislature clarified that areas declared substandard and blighted outside the city limits did not contribute to a city’s 35 percent. This allowed Sidney to move forward with plans for Sioux Army Depot.

Now the city can give the portion of the depot not already annexed by the village of Potter that designation.

Sidney will be the first in the state to attempt to attract businesses to redevelop an old military base through this process, according to Person.

“Blazing new territory again,” said Sidney mayor Wendall Gaston at last Tuesday’s city council meeting.

City staff spent several months putting together the documents for the substandard and blighted study for the area. These documents were reviewed by the panhandle redevelopment district.

“This helps to put those properties back into useful properties, enhance the tax revenue down the line and really does provide a stimulus for economic development,” Person said. “It does exactly what we were trying to get accomplished over the years.”

The Sioux Army Depot was built in 1942, during World War II. The Minuteman Missile system was installed in the 1960s, according to the city’s substandard and blighted study. The area fell into disrepair after the missile complex was completed and the army depot closed at the end of the 1960s.

“Many of the buildings and structures are dilapidated or seemingly beyond repair,” the study stated.

Material storage has been the area’s only use for many years. All of the debris and leftover material from the military base, including old pipes, an old water system, deteriorated roads and other abandoned items, deter new businesses from coming into the area.

The study also claimed that the site is detrimental to public health and safety. The high grass and other abandoned materials provide a home for rodents and other animals that could possibly spread disease. Some of the 19,000 acres planned for the project area could contain shrapnel as well as a possible cyanide pit, the study stated.

“Without the designation the property is likely to further deteriorate and some areas totally abandoned,” according to the study.

Many of the paved roads in the area had to be torn out and replaced with dirt or gravel. The utilities that do extend to the property are old, while some areas of the property are not served by all necessary utilities.

“This literally could mean multi million dollars of types of projects coming our way in the future,” Person said. “I’m not guaranteeing that they will, but I can tell you that there are projects already in the works that have been watching this process the last couple of years.”

There are still several steps in the process before the land can be officially declared substandard and blighted. Both the planning commission and the city council must first hold public hearings in the matter.

“Believe me, it meets every definition of substandard and blighted,” Person said.