An agreement has finally been reached to get a new street built so the city can hold up its end of a deal in which Hy-Vee will build a new store at 50th and O streets.

Landowners near the proposed store agreed to pony up about $566,500 to help pay to extend 50th Street from O to R streets if the city covered the remaining costs.

The City Council unanimously approved the agreement, but, leery of being asked to give its public works department a blank check, also capped the amount of street construction dollars the city will contribute at $489,000.

City officials are now estimating the project will cost between $1.1 million and $1.2 million, so if bids don’t come in low enough, the city will have to find additional dollars elsewhere, such as impact fees, stormwater bond proceeds or tax increment financing.

According to the agreement, the following property owners would pay about:

n Hy-Vee Inc., $186,000

n Summit Hotel Properties, $186,000

n Arena Skate World Inc., $145,000

n Doane College, $50,000

However, the property owners could get that much or more money back when the city buys right-of-way for the road. If enough tax increment financing dollars are generated by the project, Hy-Vee could be reimbursed for its portion of the road costs.

In addition, Enterprise Company Inc. and Doane College agreed to dedicate their rights-of-way at no cost to the city, and those are worth about $33,500.

According to the agreement, the road must be built by mid-December.

When the city made a deal with Hy-Vee as part of the mayor’s push to revitalize the area northeast of 48th and O streets, it promised to extend 50th Street as part of a redevelopment agreement.

The city planned to cover what was then an estimated $1.66 million in costs for the street, lighting, sidewalks and trees by creating a special assessment district, which would have meant that benefiting property owners would have had to repay the costs. But the property owners rebelled against that plan, and not enough of them signed on to make it a go.

The price tag went down after the city tweaked its plans, narrowing the road from 33 to 27 feet wide and deciding to leave some existing pavement in place. But then the City Council refused to pony up the entire cost of the road.

Councilman Ken Svoboda nudged both sides back to the negotiating table after being told by some property owners that they would be willing to cover some of the costs if they weren’t so abnormally high. Those negotiations led to Monday’s agreement.

And that should end this chapter of the 48th and O makeover, although before voting, Councilwoman Robin Eschliman issued a stern warning that she doesn’t intend to approve any more tax increment financing projects in the 48th and O area.

“I’ve reached my limit on 48th and O,” she said. “We have other parts of Lincoln we need to move on to.”

Reach Deena Winter at 473-2642 or dwinter@journalstar.com.