Opportunity Zone Designation Could Help These Santa Ana Projects Get Off The Ground
Santa Ana-based developer Caribou Industries has tabbed Lee & Associates to find a joint venture equity investor in the company’s ongoing efforts to build Orange County’s tallest skyscraper and redevelop the former home of the Orange County Register newspaper in Santa Ana.
Caribou CEO Mike Harrah is pitching potential investors that the proposed 37-story One Broadway Plaza in downtown Santa Ana and the 20-acre mixed-use 625IVE project at the former Orange County Register site, just off the Interstate 5 freeway, are each in designated opportunity zones.
“Every ‘opportunity zone,’ in large cities, around the country, will look to this project as the shining example of what is possible going forward,” Harrah said in a news release. “One Broadway Plaza will be an iconic tower, talk about a great way to roll-out this initiative.”
Orange County development, rising construction costs and opportunity zones will be part of the discussion at Bisnow's Orange County Construction and Development event Feb. 12.
Passed as part of President Donald Trump’s Tax Cuts and Jobs Act in 2017, the opportunity zone program allows investors to invest in economically distressed communities in exchange for a hefty tax benefit depending on the length of the investment.
There are 8,700 designated opportunity zone tracts nationwide. Each governor last year chose the sites based on neighborhoods with low-income census tracts. In California, there are 879 designated opportunity zones — the most in the nation.
Harrah pitching these projects as an opportunity zone investment is the latest effort to finally get both projects off the ground.
Harrah has tried to develop One Broadway, a 1.7M SF Class-A office campus with a 493-foot tower at 1001 North Broadway, for the past 20 years. Harrah has poured more than $90M into the development, but has yet to officially break ground, according to the Orange County Register.
In separate transactions in 2014 and 2016, Harrah attempted to purchase the 100-year-old Orange County Register newspaper but when his bid fell through, he acquired the buildings instead for a reported $60M. The Register newspaper relocated to Anaheim in 2017.
Harrah has proposed building a 2.3M SF live-work-play mixed-use campus with residential, office, retail and restaurants at the 20-acre former Register site at 625 North Grand Ave. The projected cost to develop the site is around $1B. Last year, he brought in CBRE to sell the site.
The Orange office of Lee & Associates and principals Jack Haley, Marshal Vogt, Matt Orville and Jaimeson Hearne will be partnering with Caribou Industries to find the investor and lease the sites.
“We are excited about our partnership with Mike Harrah and Caribou Industries. 625IVE and One Broadway Plaza are flagship listings for our team and will transform the perception of Downtown Santa Ana,” Vogt said. “This is a win-win for both the city of Santa Ana and investors. Currently, ‘The One’ is simply Orange County’s largest ‘shovel ready’ opportunity zone site.”
Learn more about what is driving investor interest and new development at Bisnow's Orange County Construction and Development event Feb. 12 at the Irvine Marriott in Irvine.