By Opportunity Zone Magazine Staff
Fifteen months ago, Harris Bay managing director Jake Harris had no idea what the Opportunity Zone program was — but now his private-equity group is embarking on a major OZ development on the San Antonio River Walk, and plans to focus on OZ projects in San Antonio and elsewhere for several years to come.
The new River Walk project is a 112-room boutique arts-themed hotel called the Artista, which will be built on the site of a failed construction project overseen by another developer. Harris Bay used a single-asset OZ fund to acquire the property for around $2 million in April 2019, and will fund between 30 and 40 percent of total development costs using OZ capital.
Harris Bay had previously eyed the Artista site and passed on the deal, Harris explains, but after the area’s OZ designation they took a second look. “We looked at the Artista site again, and given the additional benefits and longer 10-plus-year holding time we were able to make the deal,” Harris explains. “The OZ benefit was absolutely a deciding factor in this project.”
The Artista project, and the River Walk area’s designation as an OZ, offers a chance to boost San Antonio’s status as a major tourist destination, said Kris Feldmann, design principal at CREO, which is overseeing the architectural planning for the project. “This project is an opportunity to create a destination for locals and visitors that share a common pursuit of unique experience, artistic inspiration, and a realization that every day and night calls us to live life to the fullest,” Feldmann said in a statement.
With the Artista development underway, Harris Bay is exploring other OZ opportunities in the area. “The OZ program will be the majority of our focus for the next few years,” Harris says. “We have several other OZ deals lined up behind this one and are working on a fund that will be able to take advantage of diversified assets and markets.” That will include more hotel and multifamily projects in opportunity zones in San Antonio and elsewhere, Harris says.