Should the city help bring life back to the area near 48th and O streets, or not? That was the question debated by the public during Monday’s City Council meeting. In the end, the council decided it should.

The council held a public hearing on the proposed redevelopment of about four acres southeast of the intersection of 48th and O streets, between 48th and 50th streets. The field of concrete and weeds will be converted into a Walgreens, West Gate Bank, Braeda Fresh Express Café and Runza.

The council voted unanimously to approve the proposal.

Under the agreement the Urban Development Department reached with a development partnership — West Gate Bank, Runza National Inc. and Village Development LLC — the city will purchase the land from Julius Misle for its appraised value, $4.58 million, in January and sell all but about 15,000 square feet to the developers for about $4 million next fall. The remaining land will be retained by the city as green space that will act as a buffer between the businesses and adjacent Witherbee neighborhood.

The city also will use an estimated $500,000 in tax increment financing generated by the new businesses to improve the site.

The redevelopment of the area is a high priority for Mayor Coleen Seng. City officials and the developers have said in recent years that many developers have tried in vain to purchase the property and develop it, but without the city’s help, it  probably will remain vacant.

Urban Development Manager Wynn Hjermstad said the developers tried to buy the property without the city’s help and were unsuccessful.

Councilman Jon Camp was primarily concerned that the city could be on the hook for any environmental cleanup that could be required on the site, which in its former life was an auto dealership, gas station and, reportedly, a dump site.

Assistant City Attorney Joel Pederson said a study of the site so far hasn’t turned up any “show-stopper” environmental issues, which he defined as something requiring millions of dollars in remediation. But those same concerns about potential cleanup costs are one reason the corner has remained an undeveloped eyesore, he said, and the city has the tools and experience to deal with those issues.

“We deal with dirty dirt quite a bit,” Pederson said.

Camp was uncomfortable with being asked to just trust that everything would turn out OK.

“We’re kind of the knight in shining armor in helping out,” he said.

The city received an Environmental Protection Agency grant to study the site, and city officials are optimistic they would get additional grants if cleanup is needed.

Members of the public had varying opinions on whether the city should help get things moving at the intersection.

Nicole Thompson asked why the city would want to help build “strip malls and fast food places” rather than something unique, like green space, a miniature golf course or indoor skate park rather than “something that you can find all over the country.”

A man who lives within three blocks of the proposed development, said the businesses would be a welcome addition to the neighborhood, as opposed to the “blocks of bare concrete and weeds” there now.

Another resident questioned why the city would help develop businesses that would create minimum wage jobs. Public dollars would be better spent on economic development that brings in higher- paying jobs, he said.

“Where’s the benefit actually that we’re getting for all of this money?” he asked.

Councilwoman Robin Eschliman said the new development would generate more property taxes and sales taxes, and she asked the man whether he would rather see people remain unemployed.

The City Council declared this parcel, plus another 38 acres in the area, blighted in August 2004, opening the door to redevelopment. Urban Development officials are negotiating with a separate group of developers to build a Hy-Vee, Pinnacle Bank and strip mall northeast of 48th and O.

In other business Monday and into early Tuesday, the council:

* Approved a new cable franchise agreement with Time Warner Cable, replacing the agreement that expired five years ago. The contract leaves the franchise fee unchanged at 5 percent of gross revenue from Lincoln cable subscribers, which amounts to about $3 million annually for the city's coffers. One provision will result in a 41-cent monthly fee on cable subscribers, beginning next year. The money will be used to improve the equipment and programming on the educational (channel 21) and governmental (channels 5 and 10) access channels.

* Got an overview of a $279 million budget request for the Lincoln Electric System in 2006, an increase of $25 million over last year's budget, largely due to increasing power costs. The council will vote on the budget on Dec. 12.

* Approved a funding agreement to build a $120 million south beltway connecting Nebraska 2 in southeast Lincoln with U.S. Highway 77. The project will be paid for with a $20 million federal earmark, $80 million in state funds and $20.5 million in city funds. Beyond that, any remaining costs will be primarily (80 percent) covered by the state and 20 percent by the city. The city plans to use federal fuel tax dollars to pay for its share.

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