LINCOLN- On Tuesday, a bill that would allow Nebraska cities to remove a "blighted" designation cleared its first hurdle, and was advanced from the Urban Affairs Committee during an executive session. The bill, LB532 introduced by Sen. Terrell McKinney, changes provisions within the Community Development Law that governs tax-increment financing.

Under the TIF program, a city must declare an area blighted and substandard before it can approve a TIF loan to help cover the costs of redevelopment projects. Normally, the developer takes out the loan that is then paid back over 15 or 20 years by using property taxes generated by the redeveloped property. After the TIF loan is repaid, property taxes collected on what then should be a higher-value property begins flowing into local governments.

However, LB532, if passed, would allow the substandard and blighted designation to be reviewed and removed by the city's governing body. Blighted tags have received substantial criticism from those who say they hurt property values within neighborhoods. LB532 was meant to move forward with a proposed amendment to allocate $100 million to the Omaha Streetcar Project under the condition that the city develops a line extending into north Omaha, but according to McKinney, this amendment wasn't attached to the advanced bill.

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