Nebraska DED director defends grant management amid questions by state lawmakers

LINCOLN — Amid concerns raised by a Nebraska legislative committee, the state’s director for economic development Wednesday defended her team’s handling of a roughly $235 million grant program aimed at lifting North and South Omaha.

The hearing before the Economic Recovery Special Committee featured a question-answer period between four lawmakers and invited managers of the Nebraska Department of Economic Development. DED oversees administration of pandemic-related grant programs.

In the case of the “North and South Omaha Recovery Grant” program, funding originated from federal COVID-19 recovery dollars, but later was switched with state-funded projects to allow for more flexibility in meeting spending deadlines.

In January 2024, about 130 groups, ranging from Greater Omaha Chamber of Commerce leaders to lesser-known entrepreneurs, were awarded North-South grant funds for proposed projects intended to help transform some of the most distressed communities in the state.

State Sen. Terrell McKinney of North Omaha, the only original member of the special committee established in 2022, relayed concerns he said he’s heard from multiple grantees — that communication with DED staff has been “problematic and causing issues” in executing projects.

With an approaching December 2027 deadline for grantees to spend allotted awards, McKinney said, he was worried that some capital projects won’t be finished on time. 

‘Hard stop’

Projects include new or expanded youth-centric facilities, health clinics, a South Omaha park plaza makeover, a boost to a planned North Omaha global teleservices headquarters.

McKinney said he’s fielded concerns about “everchanging reporting requirements” and alleged delays due to DED staff turnover. He wants “bottlenecks” to be cleared “sooner than later.”

Maureen Larsen, DED’s executive director, said she’d “be happy to look into” specific complaints if lawmakers provided names, and noted that grantees are held to contractual and statutory requirements. 

She said the department offers technical expertise to grantees yet one of the biggest complaints from her team is grantees that “ghost” the agency and ignore reporting and receipt requirements.

“We also have been, as a department, becoming compliant, hard stop,” said Larsen, who became the agency’s interim director in July 2025 and permanent director four months later. “We are working with past auditor findings. We are working with statutory requirements, rules, regulations and setting up best practices and policies for grant management.”

While some North-South projects are effectively finished, Larsen said none are officially “closed,” as funding was “front-loaded” and the agency awaits final documentation.

Among grantees whose project activities have been suspended, and who has criticized the process, is Randy J. Goodwin of Fallen Giant Films. His $5 million grant was to be used to build a Hollywood-esque industry that would help retain youth and grow the local economy. DED cited “significant noncompliance with respect to the financial management of its grant funds.”

Larsen acknowledged “high turnover rate” in the Omaha office working with North-South grantees and said the Pillen administration is hiring and also tapping temporary workers to add “bandwidth” to that team. Larsen said many Omaha-based DED workers have left for jobs offered by grantees they had worked with as state employees.

“Unfortunately, we can’t compete with some of the nonprofits and private sector, but we do try,” Larsen said.

She said DED wants the North and South Omaha economic development projects to succeed and encouraged grantees to wrap up work by the deadline. If the projects are not finished, she said, state lawmakers likely would decide next steps.

‘Huge concerns’

State Sen. Margo Juarez of South Omaha, a new member of the committee, said she was alarmed Wednesday by what she heard.

Omaha moviemaker says state-funded venture paralyzed as DED stretches suspension of $5M grant

“I have huge concerns, no doubt about it,” she said after the meeting. She said there appeared in some cases to be a communication gap on what is expected of grantees.

Other special committee members present at the hearing — where testimony was limited to the invited DED administrators — were state Sens. Christy Armendariz of Omaha and Jason Prokop of Lincoln.

After the meeting, McKinney — who was among the group of North and South Omaha lawmakers that pushed for the grant program years ago — said he was “still processing” Wednesday’s discussion. He said he had unanswered questions and was awaiting answers from DED staff.

“I’ll be concerned until the grant program is completed and everybody is done with their projects,” he said.