Urban Catalyst Buys Fourth OZ Property

SAN JOSE—A multi-asset opportunity zone fund based in San Jose, Urban Catalyst, has acquired its fourth property, 147 E. Santa Clara St. Dubbed The Icon, this mixed-use building will be aimed at residents looking for a blend of the urban environment offered by Silicon Valley while also providing access to public transportation options such as the future BART station located 100 yards from the development.

“This project is the definition of transit-oriented development since it is within walking distance to downtown amenities including businesses, restaurants, San Jose State University, VTA light rail and the planned BART station,” said Urban Catalyst partner Josh Burroughs. “By building this project near transit, we are encouraging a more connected community.”

Currently a Chevron gas station across from city hall, the land is pre-zoned and pre-general planned for mixed use. The project is expected to include more than 250 units of multifamily apartments and 7,500 square feet of ground-floor retail space.

“The upswing of OZ purchases by Urban Catalyst is due to both a heavy influx of investments into our regional opportunity fund and a very active in-house acquisition team,” Burroughs tells GlobeSt.com. “We are extremely intentional with our acquisition philosophy and there will be many more announcements in the next 60 days, so stay tuned. We predict a major funding increase as we get closer to the year-end deadlines for maximum tax benefits.”

Urban Catalyst is partnering on the project with Vahe Tashjian, managing director of Dutchints Development, and is coordinating with Urban Community founders Gary Dillabough and Jeff Arrillaga on the user experience for this vertical community.

“Located right in the heart of San Jose as close to Main and Main as possible, this project allows us to maximize the number of walkable amenities offered,” said Tashjian. “As part of our overall plan, we will increase the likelihood of walking, which will directly benefit the health and social vitality of downtown.”

With four acquisitions in the downtown San Jose opportunity zone and the team of professionals working on its team, Urban Catalyst is rapidly advancing its holistic strategy to turn opportunity into impact.

“We are excited to help shape the vision for this project to ensure the property becomes a piece of the puzzle pushing us closer to revitalizing downtown San Jose into a truly great community,” said Dillabough.

Last month, Urban Catalyst closed on the second of two adjacent properties located on West San Carlos Street near Josefa Avenue, one of the busiest corridors in the downtown San Jose submarket. The firm purchased two properties in the coveted location only 200 yards from the proposed Google campus, and steps away from the SAP event center and Diridon train station. It plans to activate the Keystone property by building a new select service 170-room business hotel, which will offer onsite parking.

In May, the company acquired the property at 26 and 30 S. First St. in San Jose, parcels that include the old Lido Nightclub site.

Eligible capital gains for investment into the opportunity zone fund include gains recognizable from taxable exchanges such as the sale of stocks or bonds, the sale of a property or the sale of an interest in a partnership. Both long-term and short-term capital gains can be invested into an opportunity zone fund. Gains taxed as ordinary income and gains from certain derivative contracts are not eligible for qualifying investment, GlobeSt.com learns.

Each investor generally must invest capital gains into opportunity zone fund within 180 days of realizing capital gains. An investor generally must make an election to defer gain in the tax return for the year of the capital gains and the investment in the opportunity fund, and are solely responsible for ensuring eligibility and qualification in each investor’s individual circumstances.

Many taxpayers can defer capital gains through opportunity fund investment including individuals, C corporations (including REITs and RICs), partnerships and trusts. Only investors with qualifying capital gains are eligible for opportunity fund tax benefits, according to guidelines provided by Urban Catalyst.

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