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Awarding $115 million to ‘shovel-ready projects’ may take some time

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Awarding $115 million to ‘shovel-ready projects’ may take some time

May 16, 2022 | 6:45 am ET
By Paul Hammel
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Awarding $115 million to ‘shovel-ready projects’ may take some time
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Joslyn Art Museum construction and expansion project (Cindy Gonzalez/Nebraska Examiner)

LINCOLN — The shovels are ready for more than $300 million worth of construction projects disrupted by the COVID-19 pandemic, but the state funding authorized for these so-called “shovel-ready” projects may take a while.

And at least some applicants for the grants are wondering if recent changes in the program might mean they won’t get funds.

The Nebraska Legislature, as part of its allocation of $1 billion in federal funds from the American Rescue Plan Act, set aside $100 million for qualifying nonprofit groups whose planned museums, sports complexes and other projects linked to arts, recreation and the humanities were interrupted by the pandemic.

The $100 million in ARPA funds was on top of $15 million in state funds approved a year earlier, in 2021, in Legislative Bill 566, the Shovel-Ready Capital Recovery and Investment Act.

Awarding $115 million to ‘shovel-ready projects’ may take some time
State Sen. Mike McDonnell of Omaha
(Courtesy of the Unicameral Information Office)

All told, it provides an unprecedented $115 million pot of matching funds designed to jump-start work on construction projects delayed by the pandemic.

Patience urged

But the main sponsor of the shovel-ready legislation, State Sen. Mike McDonnell of Omaha, urged applicants for the funding to be patient.

McDonnell, in an interview last week, said the Nebraska Department of Economic Development, the agency charged with distributing the funds, is still working through hiring staff and adopting rules for handing out the shovel-ready grants.

It could be a month or more before the DED is ready to move ahead with the work of determining whether projects meet the qualifications and then deciding who will get grants and how much money they will get.

“It’s not going to happen as quickly as some people expected,” McDonnell said, noting that the legislative session ended only a month ago. “We’re asking for patience.”

Lots of ARPA funds

The Department of Economic Development has a lot on its plate. Nearly $600 million in ARPA and related funds have been entrusted to DED to dole out. Besides shovel-ready projects, there’s money for workforce housing programs and industrial recruitment.

A spokeswoman for DED said this year’s legislation, the Economic Recovery Act, or LB 1024, called for the creation of a special committee of the Legislature to advise the department on the distribution plan that will be developed by DED. Final decisions about who gets ARPA grants will be made by DED Director Tony Goins.

One thing is for sure — there won’t be enough money to meet all the requests. 

Last summer, 125 applicants submitted proposals seeking a total of nearly $335 million in grants — well over the $15 million then available and nearly three times the $115 million now available through the shovel-ready program.

Omaha zoo, Joslyn apply

Joslyn Art Museum construction project
Joslyn Art Museum construction and expansion project (Cindy Gonzalez/Nebraska Examiner)

There’s a wide range of applicants. For instance, Joslyn Art Museum is asking for $15 million for an expansion project, and the Henry Doorly Zoo in Omaha is requesting $10 million for a sea otter exhibit. Elsewhere, Humboldt is seeking $500,000 to renovate the town auditorium, Seward is asking for $5 million for a wellness center and the Legacy of the Plains Museum in Scottsbluff is seeking $300,000 for a Japanese hall exhibit.

Some projects might get less than they asked for. And it has yet to be determined whether all the grant requests qualify for the funds. Nonprofits are required to have raised private funds to match the ARPA request, dollar for dollar. The bill also requires construction to begin by June 30 and to demonstrate that the pandemic hurt their fund-raising effort.

In addition, the rules of the game have changed slightly. 

LB 566, passed in 2021, stated that grant applications for the original $15 million would be considered “in the order in which they are received,” and if the application qualified, the money would be awarded. That “first-come, first-served” plan inspired a rush to apply early.

Rules amended

This year, the rules were amended to require the funds to be distributed equally among each of the state’s three congressional districts and so funding priority would be given to requests of $5 million or less.

That has created anxiety among some of the applicants.

Bruce O’Neel, executive director of the Elkhorn Athletic Association, said he figured his group’s request for $10 million to help build a $52 million multisports complex near Valley was sitting pretty good after being the 36th project submitted.

Now, with the updated rules, he’s not so sure, and he wonders whether there will be enough money to go around in each congressional district.

“At this point, we’re expecting the worst and hoping for the best,” O’Neel said.

The Elkhorn Athletic Association is planning a multi-sports complex near Valley to draw regional soccer, baseball and softball tournaments to Nebraska that now go to other states, due to a lack of large complexes here to host them.

Regional tournaments

Phase one of the 142-acre MD West ONE Sports Complex near 264th and Ida Streets will include eight combination baseball-softball fields with artificial turf infields, six all-weather fields for soccer and football, concession stands/restrooms and enough parking for 2,500 vehicles.

Also included is a barrier-free, all-play field and space for children with developmental or physical disabilities in conjunction with Boys Town Pediatrics

O’Neel said the goal is to keep spending on youth sports tournaments in Nebraska. Right now, families must travel to the Des Moines, Sioux Falls or Kansas City areas for tournaments, spending on motel stays and restaurants there.

“They’re killing it,” O’Neel said, as far as attracting spending by visitors.

Nebraska, he said, needs a destination sports complex for youth sports, which has grown to an estimated $19 billion industry.

McDonnell said the rules were amended to “be fair” and to make sure the state gets the greatest impact from the shovel-ready money, “east, west, north and south.”

“We know that all the projects are important,” he said. “I believe there’s a fair and thorough process that’s going to be put together by the DED.”