The Omaha streetcar is 2 years behind schedule. Businesses doubt they will survive to see it open

Questions flew at the city engineer as he explained what the “heaviest construction year” on the Omaha streetcar project would mean for downtown’s Capitol District. About 20 neighborhood business owners and residents attended the January info session put on by the city.

“Why do they have to close that down?” probed an exasperated landlord.

“Will there be any way to cross that for pedestrians at all?” asked a troubled sports bar owner.

When the presentation ended, a nearby apartment dweller spoke up from the back row of the hotel conference room. With a homemade sign reading “Speed it up” around her neck, Connie Winkler told the city officials that she’d had enough of the construction delays, torn-up streets and restaurant closures in her neighborhood.

“I’m gonna be dead before there’s a streetcar down here,” the 77-year-old said.

Two years of heavy construction on Omaha’s streetcar project has disrupted lives and livelihoods for business owners, workers and residents in downtown and midtown. They point to the noise and dust stirred up by jackhammers. The confusing maze of construction and closed roads. The plummeting sales for restaurants and bars along the construction route.

The pain will last longer than expected. The streetcar was originally slated for a 2026 completion. It’s now nearly two years behind schedule.

In interviews and behind-the-scenes emails, city officials working on the project pointed to the Metropolitan Utilities District, saying it has caused about a year of delay by demanding extra work on its water and gas infrastructure at the city’s expense.

MUD leaders deny that its work increased in scope or drove delays. The utility district has strived to accommodate the city’s aggressive streetcar schedule while protecting its own ratepayers, officials said.

Staring down two more years of road work, struggling businesses are banding together. A new alliance of streetcar-impacted business owners met for the first time on Monday and compiled demands to take to City Hall.

Without public financial aid, restaurant and bar owners told the Flatwater Free Press, they might not make it to see the streetcar open in 2028.

Addy’s Sports Bar and Grill is down about $300,000 in sales and a handful of servers at its downtown location since the construction picked up last year. Even usually reliable events like Creighton basketball games and pro volleyball matches are delivering “less than half a crowd,” said owner Tim Addison.

Now, Addy’s has to contend with a block-long strip of missing road and orange barricades at its front door on 10th Street.

“If (the construction) would’ve been a tighter timeframe, we could’ve planned for it a lot better,” Addison said. “If we continue at this pace, a lot of us won’t be around to benefit from that.”

Where the future streetcar will one day run past City Hall, an intersection outside the mayor’s office sat dormant in mid-May 2025.

MUD had withdrawn its crew that was supposed to install new gas pipes at 19th and Harney streets, escalating a monthslong dispute between the utility and the city over what work needed to be done along the streetcar route and who should pay for it.

Two years earlier, the two government agencies : MUD would pay $7.6 million for upgrades to its water and gas infrastructure under the track, and the city’s Streetcar Authority would cover the rest with . MUD estimated all the utility work would cost $20.5 million.

But in the months following, MUD added more extensive and expensive work to the to-do list, said city Public Works Director Bob Stubbe.

“When you look at the overall gas and water work, their scope increased. That’s obvious,” Stubbe said.

The original agreement was to replace MUD’s underground pipes within about 10 feet of the tracks on either side, but the utility later demanded replacement of lines farther away from the rails, Stubbe said.

On top of that, MUD had begun insisting on replacing a 48-inch water main under Turner Boulevard — a demand that could cost the project millions of dollars and massive delays, Deputy City Attorney Jennifer Taylor wrote in a May email to MUD attorney Mark Mendenhall.

“I need to ensure that the District does not continue to engineer additional expenses … and continue to impact the project schedule,” Taylor wrote. “This project is already almost a year behind schedule and the only work done to date is utility work.”

The estimated cost of MUD’s work ballooned to $43 million last spring, but the utility held firm that it wouldn’t pay more than $7.6 million — an amount it negotiated to protect its ratepayers from rate hikes, said MUD President Mark Doyle.

MUD fought the streetcar project from the beginning, added millions in cost, caused more than a year of delays and is “now trying to bill (the city) for additional gas upgrades they’ve unilaterally decided to do that aren’t required for the project,” Omaha Streetcar Authority board member Steve Jensen wrote in a May email to a consultant.

In emails to Taylor, Mendenhall denied the utility had added unnecessary work, calling the allegation “a distraction” from the fact that MUD was approaching its cost cap. If the city didn’t firmly commit to paying MUD for work, crews would be pulled from streetcar work, he wrote.

MUD did end up pulling one of its two gas crews working along the route on May 13. The crew returned in July when the sides settled on a payment process.

Any delays caused by the stoppage are the city’s to answer for because it wasn’t covering MUD’s costs, Doyle said in an interview.

The scope of the utility’s work didn’t increase, Doyle said, noting that the Turner Boulevard water main needed to be replaced because the city chose to work on a sewer near it.

MUD’s original cost estimate was off because the city had not yet designed the project, which would have allowed the utility to better forecast the necessary work, Doyle said. MUD also didn’t have control over the costs of replacing water pipes, which was done by a private contractor, Mendenhall added.

Other project costs, like , have similarly increased since early estimates, Doyle said.

“This would be a different project had we spent the time up front to design and cost out everything to at least 80% or 90%,” Doyle said.

Former Mayor Jean Stothert said it made sense to do some extra utility work along the route to ensure no big water or gas mains broke under the streetcar, but MUD just kept leveraging the city for more work and money.

Stothert said MUD is primarily responsible for the nearly two years of delay to the streetcar project, while Stubbe puts the figure around a year. Doyle strongly denies MUD caused any delays.

The original plan to open the streetcar in late 2026 was always a bit unrealistic, but 2027 felt possible, said Streetcar Operations Manager Eric Miller.

Mayor John Ewing, who took office during MUD’s partial work stoppage, declined to comment on project delays that happened before his inauguration, noting that he has fought to prevent further slippage of the streetcar timeline.

“There were discussions when I first took office about the spring of 2029 and I said, ‘No, we can’t do that,’” Ewing said.

Weeks into Ewing’s term, the city agreed to cover the $5.3 million water main replacement on Turner Boulevard.

City and MUD leaders now meet regularly and have a solid working relationship, Ewing and Doyle said. The conflicts over payments and scope are behind them, they said.

Addison, the owner of Addy’s Sports Bar, wishes the city and MUD could have sorted out their differences more quickly.

“It’s very frustrating to know that two government agencies couldn’t get together, and it’s affecting the general public and people’s families,” Addison said. “It’s just too bad that we’re all struggling because of that.”

At Bob & Willie’s Wonderbowl in the Blackstone District, disruptive utility work and depressed sales were starting to take a toll.

Phil Schaffart, owner of the mini-bowling alley and two nearby bars, told city representatives in a March 2025 email that his businesses weren’t going to make it if the construction continued deterring customers.

“We’ll lose our businesses and many people will lose their jobs,” he wrote.

Seven months later, announced the death of Bob & Willie’s on Farnam Street and a drink special: 10% off for those wearing funeral attire on the last day of business.

More than a half-dozen businesses along the streetcar route have closed since road construction started, according to a Flatwater analysis. Already this year, and in Midtown Crossing shut their doors.

The tough times spurred Mercury bar owner Clark Ross to launch the Streetcar Impact Alliance this month.

The downtown bar, situated between streetcar construction and , saw a 20% decrease in sales last year, Ross said. That’s devastating “in an industry that has an ideal profit margin of 10%,” he said, noting that he had to lay off staff.

Streetcar construction has hit Mercury like another pandemic, except this time there has been no government relief to bail out the bar, Ross said.

“It feels like the city has jammed a knife in between our ribs and is just letting us bleed out,” Ross said. “There is zero chance we’re going to make it like this — even if (the streetcar) finishes in 2028.”

At Long Dog Fat Cat in Midtown Crossing, sales were down 18% last year, a rare drop for the pet supply and grooming shop, said manager Justin Domina. Poor access to parking has been the main driver, he said.

The store’s lease ends in 2027. Its owners are still deciding whether to stay or go, Domina said.

At Addy’s, noisy, dusty construction emptied the usually jam-packed patio last summer, Addison said. Now, the sidewalk linking the restaurant with the CHI Health Center is closed, cutting off a vital supply of customers.

Jamie Costine took over Nosh Restaurant and Wine Lounge across the street last spring. But construction complications have tainted the first-time restaurant owner’s dream job, she said.

Besides the drop in foot traffic, she lost water for three lunch services when work crews broke a water line, she said.

During the holidays, Nosh’s prime season, workers parked a dumpster in front of the restaurant, Costine said.

“How appetizing is that for a wine lounge?” Costine said. “Somebody’s coming in for an upscale meal and a great glass of wine. They don’t want to be standing and looking at a dumpster.”

Ewing said he understands business owners’ frustration, and his goal is to help them survive to reap the rewards of the streetcar.

“I don’t want people to think that in any way I’m being insensitive to the pain that this is causing them, because I do understand that this is their livelihood,” Ewing said.

The city’s campaign to spotlight businesses has included running to establishments along the route and distributing promotional encouraging visits to affected businesses.

Last year, the Greater Omaha Chamber from an anonymous donor to Blackstone and Midtown Crossing businesses. A chamber spokesman declined to detail the source of the money, which businesses received funds or how much they received.

Ewing said he pushed for construction changes to accommodate businesses, including delaying the demolition of the Farnam Street bridge over Interstate 480 until after the holiday shopping season.

In response to Capitol District business owners, the city has turned a few blocks of Douglas Street into two-way traffic to avoid a longer detour, the Mayor’s Office said.

Shamrock Development CEO Mike Moylan, who rents to a dozen businesses downtown, said the city has been attentive and helpful since the January forum, but more advance notice of plans should be given to business owners.

Still, business owners told Flatwater the city’s efforts haven’t helped: They need money.

More than 100 business owners and residents gathered at Mercury this week for the Impact Alliance’s first meeting. They approved a series of demands to send to the city, including a direct grant fund, targeted tax breaks and free parking along the route.

The alliance will look to gain nonprofit status, so the city knows it won’t fade away, Ross said.

“We refuse to let the future of Omaha be built on the bankruptcies of our local shops or the displacement of our neighborhoods. Tonight, we are going to move from impacted to organized,” Ross said to a roomful of applause.

Ewing said it would be illegal to give city funds to private businesses. A spokeswoman said the office will review and respond to the alliance’s demands.

“I think the real answer is what do the business owners want to do when they know that we can’t give them financial resources?” Ewing said.

To Addison, it’s hard to be optimistic about the streetcar when he doesn’t know whether it will improve his restaurant’s fortune. Other supposed game-changers like the ORBT bus and the protected bike lane have done little for business, he said. Will this one be different?

“We want to support it. We really do,” Addison said. “To put this many people’s livelihoods on the line for a hope, God, that scares the hell out of me.”

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This story was originally published by and distributed through a partnership with The Associated Press.

A muddy dispute

The dumpster in front of the wine bar