Council approves $1.5 million LB840 loan for downtown Paddock building redevelopment

The Beatrice City Council voted 8-0 in May 2025 to approve a $1,500,000 LB840 economic development loan to Paddock LLC to support redevelopment of the historic downtown Paddock (Kensington) building into housing and commercial space.

The loan, adopted by Resolution No. 7558, is structured to be paid out over nine years with incremental releases of funds each year tied to project milestones; if the borrower satisfies terms and conditions in the loan agreement the balance may be forgiven, city staff said. The council immediately followed that vote by approving Resolution No. 7559, granting Hoppy and Son LLC a 15-year right of first refusal on two adjacent lots that are required to remain a playground under a Department of Economic Development (DED) grant.

Why it matters: the project repurposes a 1924 historic building into 36 residential units and ground-floor commercial space aimed at supporting downtown businesses, while using local incentives and state and federal financing to close project gaps.

Developer Evan Clark, introduced himself as with Hobby Development and told council the full project is expected to cost about $9,940,000. He said the redevelopment will create 36 units, a mix of studio, one- and two-bedroom apartments, and a first-floor collaboration space funded in part by USDA financing that will include four to five incubator spaces and additional co‑working and conference rooms. Clark said the developer is working with Main Street and local partners and credited the city’s incentives for making the project feasible.

“This project wouldn't happen without the city, so we're very appreciative of the community supporting us in this project,” Clark said.

Clark described the schedule as follows: asbestos abatement and selective demolition are underway; the team expects to close final construction financing at the end of the month and then begin an approximate 18‑month construction period. He said residential units could be available in January–February 2026, commercial space in mid‑2026, and full completion in 2027.

City staff described how the LB840 loan will be administered: annual disbursements tied to completion milestones, documented by the developer; if all terms are met the loan may be forgiven at the end of the term. Council discussion included appreciation for staff work on loan figures and confirmation of other financing sources cited by the developer, including TIF, a rural workforce fund administered by the Nebraska Department of Economic Development, and USDA programs.

The council approved both resolutions unanimously. The meeting record shows the consent motion that included Resolution No. 7558 passed 8-0; the right-of-first-refusal resolution likewise passed 8-0.

The council also discussed that covenants related to the DED grant require the city to keep the two playground lots in use as a playground for 15 years or risk repayment to DED; the right-of-first-refusal gives the developer the first opportunity to buy those lots for $100 if the city later decides not to use them as a playground during that period.

The project team and city staff indicated additional financing steps remain before construction fully mobilizes; the council's action provides local LB840 support that staff and the developer said is instrumental to the project's overall financing package.