By Opportunity Zone Magazine Staff
Virtua Partners is leveraging Opportunity Zone capital for a new $20-million multifamily development in Tempe, Arizona, in a deal that combines Opportunity Zone (OZ) benefits with local urban revitalization incentives.
About $8 million in OZ capital will be used for the development, drawing on a combination of direct investments and capital from Virtua’s $100 million multi-asset OZ fund. The 90-unit project is being built at 1980 East Broadway Road, on a run-down lot currently occupied by an abandoned flower shop, with rusty chain-link fencing and weeds growing through the cracked asphalt.
“It’s a blighted location,” says Nick Montague, president of Quyp Development, the development arm of Virtua Partners. “This area is distressed and hasn’t seen anything like the investment that’s been made in the more central area of Tempe.”
Combining OZ benefits with fee waivers made available through Tempe’s Broadway Revitalization Corridor initiative turned the new development into an attractive proposition for Virtua’s investors, Montague says. In exchange for the local incentives, as many as 25% of the property’s units will be designated as workforce housing and made affordable for local workers.
“One of the most exciting aspects of this development is that it lives up to the social impact measures that the Opportunity Zone program was designed to promote,” adds Quinn Palomino, CEO of Virtua Partners. “We’ve held detailed discussions with local and state officials to make sure this project meets the needs of the local community.”
The project is the second major development bankrolled by Virtua’s OZ fund, after construction began in February on a Springhill Suites by Marriott development in nearby Avondale. Virtua prides itself on being an early mover in the OZ space, and has already held a groundbreaking ceremony at the Tempe site.
“The heavy equipment comes out next week, and then we’re off to the races,” Montague says.