Why Do Companies Keep Swiping Left On Downtown Omaha?
If Omaha wants to be a thriving city that can attract and retain talented individuals, families and companies then it will need to offer a vibrant urban core. One of the drivers of urban core vibrancy is a strong employer presence in the central business district.
Today, Downtown Omaha has about 28,000 jobs.
Two reports recently came out entitled Why American Companies Are Moving Downtown and Job Sprawl: Employment Location in U.S. Metropolitan Areas which both took a look at the geography of employment density in the US.
The following passage from one of the reports give the lay of the land:
“In the late 1960s and ’70s, companies across the country began leaving downtown cores for suburban office campuses.1 By 1996, on average less than 16 percent of jobs in a metropolitan area were located within three miles of the traditional city center, down from 63 percent as recently as 1960.”
The reports got eastof72nd.com staff thinking about how Omaha measures up in the downtown job department. How does Omaha stack up against other cities and will Downtown Omaha ever make a 1960’s comeback?
What’s a mid sized American city gotta do to get some love downtown?
It’s no secret that businesses have been swiping left on downtown Omaha lately: (ahem) HDR.
The past couple years have been rough with Pacific Life pulling out of the Landmark Building and Con Agra cutting 1,000 jobs in Downtown Omaha and moving its headquarters to Chicago.
The next round of moves have brought even more disenchantment for Downtown Omaha advocates. First you had Buildertrend opening up their state-of-the-art 110,000 sq ft, 14 acre campus location near 118th and I Streets late last year. Next, Scooter’s opened a new 65,000 sq ft headquarters out near 144th and Hwy 370. Sojern just announced a new headquarters all the way out near 180th and Dodge that will house 300 employees at 40,000 square feet. To add insult to injury, Core Bank is getting ready (Winter 2018) to move into their new 60,000 sq ft headquarters also near 180th and Dodge.
As you walk downtown you get the sense that something might be off. The streets are often empty and give off a post apocalyptic vibe. Ground floor retail vacancies only make the perception seem worse.
What gives?
As the Chamber of Commerce executes on its Prosper 2.0 initiative will we see Downtown Omaha getting its just desserts? The Prosper 2.0 plan calls for 10,000 new or newly trained technology workers by 2024. It also aims to attract or help grow 250 new startups in the area, and $3 billion in new investment. The question remains to be asked and answered: will Downtown Omaha get its fair share?
How does Omaha actually stack up?
The report called Job Sprawl: Employment Location in U.S. Metropolitan Areas took a look at the 100 most populous metro areas and ranked them from very to dense to sprawled.
The results are in: despite how it may feel, Omaha is actually middle of the pack nationally when it comes to percentage of total MSA jobs located in its central business district plus a 3 mile radius. The national average of the top 100 US Metropolitan Statistical Areas (MSA’s) was 22% and Omaha weighed in at an extra average 22.53% of all metro jobs being located within a 3 mile radius of its central business district.
Omaha’s Chamber of Commerce publishes its Barometer Report and lists its “Comparison Cities”
Compared to the “Comparison Cities” that were reported on in Job Sprawl: Employment Location in U.S. Metropolitan Areas Omaha placed 4th place out of 8.
Not great but not too shabby either!
We’ve had some wins as of late.
- Kiewitt swiped right on Downtown Omaha, electing to move from their longtime Blackstone hq to north downtown.
- Mutual of Omaha Bank is packing up shop from its current Midtown location and moving to the Landmark Building downtown.
- Flywheel has been growing like crazy and has demonstrated a committment to remaining downtown, first moving into the old Patrick’s grocery store building and now eyeing a location in North Downtown.
- The Boston based tech startup, Toast, didn’t just swipe right on Omaha, they did the equivalent of paying for a Tinder Plus subscription and setting the radius to 2000 miles, before “Superliking” Omaha.
- NY based Metlife also is opening an office in Omaha, locating at Gavilon’s old building and plans to hire 150–250 employees to staff it.
- The rumor mill reported that First Data might be a match for Downtown Omaha sometime soon, moving from their Aksarben hq and giving UNO a chance to expand its south campus even more, which could be a tremendous win for the city all around.
- Furthermore, Omaha’s central business district office vacancy rate is just 4.3% according to a CoStar report.
There is clearly some momentum but work still remains
The proposed streetcar project will undoubtedly make Omaha’s downtown a more attractive place for living and working. If the streetcar gets approved and build it could attract significant investment along the Dodge-Harney corridor from UNMC to downtown. But according to a Goss and Associates report one of the factors making the streetcar less likely to ever even be built is lower than desired employment along the proposed streetcar route.
Even if companies decide that they want to be located in Downtown Omaha there may be some challenges that employees face:
- Parking: it’s a perceived and real problem. Downtown Omaha has a glut of parking but not always parking where it’s needed. A recent parking survey found that downtown has 41,000 parking spots and that during peak hours 18,000 of them sit unoccupied. The parking problem was enough to keep HDR from relocating to Downtown in 2016.
- Commutes: Since so little employment is located near downtown a move from a West Omaha headquarters to downtown will immediately increase average commute times since many employees live west of 72nd.
- Housing: Demand for housing in the urban core is high with many houses being sold for more than the asking price. This is great but it makes housing in West Omaha relatively cheaper which keeps workers living out west.
- Schools: Families find an additional challenge to moving downtown in the form of lower performing schools.
There are a ton of challenges but the future is bright
Omaha must continue pushing towards creating a vibrant urban core to ensure that it remains an attractive place to live, work and play. Live and play options seem strong with work options in the central business district lagging. Fortunately, developers and forecasters are bullish on the future employment growth in Downtown Omaha with much more new and planned square footage being to delivered and vacancy rates for Downtown Omaha remaining low and below the average for all of Omaha.
The resolution
Groups are forming around the idea of downtown job density. Currently, a survey is being conducted to get employer feedback to understand the problem of lack of downtown job density better.
Low lying fruit might come in the form of setting goals about Downtown Omaha employment. Today we stand at 28,000 jobs downtown which is about 6.3% of our city population. About 22% of our MSA’s jobs are in the central business district plus a 3 mile radius. Setting modest yearly goals of improving these ratios by 5% annually or until these figures increase to 15% and 33%, respectively, would be a wise first step. This might be something that the Chamber of Commerce could add to its Prosper 2.0 plan and potentially adopted as a part of the City of Omaha’s Master Plan.
As for me, I’ve finally figured out what one individual without any money can do to increase downtown job density in Omaha. We created the Nomadic Coworkers Union and we’re getting together a group of remote workers/entrepreneurs without offices and meeting up en masse in and around Downtown Omaha coffee shops to get work done and do our part to make Omaha’s urban core more vibrant.
