Apprentice program aims to help fill Omaha inner city housing gaps, serve as statewide model

A cluster of newly constructed houses west of the North 24th Street commercial corridor near 25th and Ohio Streets is seen as an example of housing development that could result from a new apprenticeship program launched by Omaha-based nonprofit Spark. Buey Ray Tut, Spark CEO, stands at the front of a home built by a graduate of the Spark "Developer Academy." Just announced is a next-level initiative called the co-Development Apprenticeship program, or coDA, which is designed to boost more of the graduates into actively building affordable housing. (Cindy Gonzalez/Nebraska Examiner)

OMAHA — For Donell Brown, the pieces of a budding real estate business fell into place rather naturally.

By day, he's a supply chain manager at a Fortune 500 company. But a friend's suggestion prompted him to soak up Spark's "developer academy" training in 2020. He promptly clinched a sweet financial deal on a row of lots in the heart of North Omaha, and is now hosting open houses for his first four newly constructed residences.

Spark's chief executive, Buey Ray Tut, calls Brown a star product of the nonprofit's academy, whose aim is to launch homegrown developers that can help rebuild their communities with much-needed housing.

The problem, said Tut, is that Brown is more the exception than the rule.

Most of the roughly 85 graduates of the academy have not taken the same leap — either unable or unwilling to assume the financial risk that comes with developing property, Tut said.

Next level

In an effort to turn that around, Spark is now launching the co-Development Apprenticeship (coDA) — a sort of next-level initiative that will offer additional guidance, an actual project site and investment opportunities that can give budding developers more of a running start.

"Think of it as the residency program in medical training," said Tut. "While our Developer Academy serves as the medical school, coDA provides the hands-on, practical experience necessary to become a seasoned developer."

Spark unveiled the applied learning initiative Friday at an event that started at the Fabric Lab community space near 24th and Lake Streets and ended around the corner at 25th and Ohio Streets with a tour of Brown's three-bedroom, 2.5 car-garage houses on the market for about $265,000.

To keep the homes affordable for families, Brown said buyers will work with mortgage assistance programs offered by nonprofits such as Habitat for Humanity and Omaha 100.

"The hope is we have more people that go on like Donell has," said Tut, whose nonprofit also has a financial arm, Spark Capital, that helps emerging developers such as Brown with construction costs.

Tut said many of the other academy graduates have gone on to advance in real estate related jobs, or make marks in other ways, but the nonprofit wants to see more housing creation in disinvested areas.

Potential to replicate across state

While the Spark focus has been on North and South Omaha — two of the most diverse and disadvantaged areas of the state — organizers see potential for the model to be replicated and tailored to address housing struggles in other Nebraska urban and rural communities.

Spark's developer academy has already been replicated in cities such as Tulsa and Milwaukee.

K.C. Belitz, director of the Nebraska Department of Economic Development, was among the few dozen guests attending the coDa kickoff.

In an interview, Belitz noted the demand and shortage of quality affordable housing throughout Nebraska. A state housing study and report released last year said Nebraska's economic future hinged on solving its "housing crisis." The report, led by state policymakers, legislators and others, set a statewide goal to produce 35,000 new and affordable housing units by the end of 2028.

Belitz notes that the Spark programs won't solve the larger housing shortage, but he views the effort as a catalyst that can spur infill projects, and he believes that more Nebraska communities could benefit from similar efforts.

"I hope it's successful here," he said.

Ryan ZimmerMas, a Spark project manager and former DED staffer, said Spark's mission with the initiative is to build a local and diverse talent pool that is best equipped to home in on community-level needs and solutions.

He said his team recognizes there is no one-size-fits-all approach to housing development. North Omaha's most pressing need might be filling in vacant lots, ZimmerMas said, whereas South Omaha has a demand for rehabilitation, midtown Dundee could use "Missing Middle" housing and rural towns have their own challenges.

The premise is that individuals with roots in an area have a deeper connection. Like Brown, local owners or developers often have a vested interest in that family and friends still live in the area.

A "bottom-up, local approach to addressing housing problems," is how he and Tut describe the model.

'Ripple effect'

While coDa will take on small-scale projects — the first two development sites will be a residential lot and a building that was donated — Spark representatives expect visible change in neighborhoods.

"We want a ripple effect," said ZimmerMas.

Applications for coDA are now open . Tut hopes to assemble at least one cohort yet this year of up to five emerging developers. He anticipates the number of teams to grow annually.

Participants must be committed to a two-year project period, though the program manual says Spark recognizes that most are employed full time and that a designated project manager would provide oversight and help keep projects on track.

Spark representatives said preference will go to applicants from underserved communities, who have geographic ties to the project area and who have graduated from the Spark Developers Academy (which is full time for a week, with ongoing and occasional seminars).

Acting as a "matchmaker," Spark will pair the coDA apprentices with a project site. Spark is to retain full decision-making control in transactions and own at least 51% stake in all properties.

"We will own most of the risk," Tut said. "We act as that financial backstop."

Participants will have "skin in the game," ZimmerMas said, providing "sweat equity" and paying a participation fee likely of 0.5% of the total project cost. That investment could be recouped as a developer fee or even turn a profit, depending on the success of the project.

Apprentice developers participating in rental projects have options of having an ownership stake in the property.

Brown plans 'Phase II'

Brown, 39, said Spark introduced him to relevant players and resources that helped smooth his way in the real estate development industry.

He has no plan to leave his Union Pacific Railroad job — Brown said he loves problem solving in the corporate world.

But he plans to further grow his Lionhead LLC business that also includes about 15 rental properties. Brown said the passion for real estate, renovation and design was instilled by his great-grandmother, who used to have him "take notes" as a kid while watching TV shows like "This Old House."

He fondly recalled the two tackling small projects together around her house, such as when they transformed an old washing machine into a fountain for the garden.

Next up, Brown said, is a Phase II housing development near his current project site. Larger than the first new construction project, he envisions a mix of up to 15 dwellings, both rental and for-sale, including townhomes.

Having grown up in North Omaha and after acquiring two graduate degrees from Nebraska universities, Brown is hopeful to see a revival of the historic area that in its heyday swelled with popular cultural, jazz and commercial structures and activity.

Seeking 'full circle'

The four homes Brown is now selling are along the new North Omaha Trail and not far from his dad's worksite where Brown spent much of his youth.

Some businesses have sprouted nearby. North End Teleservices is building its new multimillion-dollar corporate headquarters and mixed-use campus at 24th and Lake Streets.

Last week, crews were working at the intersection, rebuilding the Martin Luther King Jr. Cornerstone Memorial.

Scant still, Brown said, are new homes and residential bustle.

"I'm hoping to see it come full circle, living and working and enjoying life in that area," he said.