BELLEVUE — One partner has pulled out but another says it will push forward on a real estate redevelopment billed as a kickoff to renewal in Olde Town Bellevue.

Amid fanfare last summer, officials in Nebraska’s oldest and third largest city unveiled plans for a $12 million mixed-use apartment building on the site of the now-razed City Hall.

The proposed Bridge Flats, containing 53 luxury rental units and about 18,000 square feet of street-level retail space, was described as the first phase of an anticipated downtown revitalization called the Frontier District. The city approved a $2.4 million tax-increment financing subsidy for the apartment building.

However, questions surfaced in the last several days when a representative of Perry Reid Construction, part of the development team, told subcontractors the company was yanking participation amid market conditions and financial feasibility concerns.

Another partner on the development team, Mercury Builders and Contractors, confirmed its ongoing commitment in the project. Jeff Gehring, Mercury co-owner, said his firm bought the downtown property in mid-2020. He said ownership and operations of Bridge Flats will be under a limited liability corporation called Mission LLC, of which he is a partner.

“We are working with other entities to ensure Bridge Flats anchors a renovation of downtown Bellevue,” said a media statement from Mission LLC.

He said rising interest rates and construction costs that also have delayed numerous other construction projects nationally have caused the development team to explore design changes to the project.

Once potential modifications are determined, a new construction schedule will be set, Gehring said. Previous projections had a construction launch for last October.

Jim Ristow, Bellevue city manager, characterized Perry Reid as a junior varsity player in the project and said the city expected the development to remain “on track.”

Earlier announced plans indicated the four-story Bridge Flats would rise northeast of Mission Avenue and Washington Street, the spot where the city’s government offices once stood. Today, the area remains vacant with a fence around it.

Gehring said positive news is that the developer has verbal agreements for much of the first-floor retail space in the building and that he has felt enthusiasm from community members.

Officials have said they anticipate the residential and commercial project to spark revitalization of a roughly three-block stretch along Mission Avenue toward Hancock Street.

The vision, according to Bellevue officials, was to preserve the Olde Towne charm of the first city of Nebraska while modernizing part of the downtown corridor with common areas and landscaping.

They said they aimed to make Bellevue more competitive with other Omaha metro area suburbs that have revitalized their core in the hunt for more economic development, businesses and talent.

This story was originally published by Nebraska Examiner, an editorially independent newsroom providing a hard-hitting, daily flow of news. It is part of the national nonprofit States Newsroom. Find more at nebraskaexaminer.com.