White House Opportunity

White House Opportunity and Revitalization Council Executive Director Scott Turner, center-right, met with Mesa Mayor John Giles, center-left, and representatives from Caliber and Arizona State University during a tour of Arizona opportunity zones in June 2019 to examine opportunities for revitalization and investment.

Another new housing project is coming to downtown Mesa.

Located on a 2.54-acre lot spanning 2nd Avenue between S. Robson and S. MacDonald streets, The Commons of Mesa will comprise 12 three-story buildings with 144 residential units, a pool, dog park and outdoor gathering spaces. 

With monthly rent anticipated to range between $1,235 and $1,935, CaliberCos Inc. describes the units as “affordable workforce quality housing at a reasonable price.” The buildings will contain 48 one-bedroom and 96 two-bedroom apartments.

“We are proud that Caliber’s Opportunity Zone Fund is leading the effort to redevelop Downtown Mesa,” said John Hartman, the company’s chief investment officer. “This will further attract residents and workers to the downtown area.”

Caliber, a vertically integrated alternative asset manager and fund sponsor, began acquiring properties in and around downtown Mesa in 2017 and owns 20% of the frontage on Main Street. 

The Scottsdale firm runs a number of investment funds – including one focused solely on properties located within opportunity zones.

Essentially, opportunity zones allow individuals to temporarily defer taxes on capital gains and potentially avoid taxes on new gains if they invest capital gains in specific areas approved by states and the federal government. Often those areas have been considered under-developed or run-down and in need of some government help of some kind to spur investment in them. 

If a qualified investment is held for five years, there is a 10 percent exclusion of deferred gain. That goes up to 15 percent if the investment is held for seven years, according to the IRS.

“Selecting winning opportunity zone projects requires much more than a discerning eye and reliance on the federal program’s tax advantages. It requires careful strategy,” explained Caliber CFO Jade Leung. 

He said the company considers regional growth and future potential, population trends, workforce pool, access to public transportation and healthcare facilities and that it works closely with local governments to identify needs.

Caliber’s investment in Mesa’s opportunity zone includes 10 vintage 1940s buildings totaling 160,000 square feet that are being refurbished for local tenants with diverse types of businesses, including a farmers’ market, butcher, bakery, wine sales, small booths and restaurants. 

“It’s important to keep the down-

town area interesting and walkable,” Hartman said.

Downtown Mesa has experienced a renaissance in the past few years with the introduction of light rail service, redevelopment of its historic core, and the new Arizona State University Campus at Mesa City Center. 

“With more than a thousand students, faculty and staff expected to join our new facility in the city center, I am very excited to see new housing options like The Commons develop,” said Jacob Pinholster, founding director of ASU at Mesa City Center. “Downtown Mesa is such a vibrant and energetic place to be and I expect The Commons to help new residents live closer to the action.» 

The campus is set to open this year as home to the Sidney Poitier New American Film School and various programs within the Herberger Institute for Design and the Arts.   

“In addition to all the momentum occurring in Mesa, we are excited about the opportunity from an economic sense as the Phoenix Metro area currently leads the nation in rent growth 17% from June 2020-June 2021,” said Hartman, adding: 

“Additionally, comparable rents within the Mesa area have risen to over $2 per square foot, and the city’s population is expected to grow 6% by 2026, making the prospect of multi-family development extremely attractive.” 

Future job growth in Mesa over the next 10 years is projected to be 47%, far outpacing the national average, Hartman noted, adding, “The Commons of Mesa is strategically located to attract this new workforce.”

Caliber is raising equity for this project in the amount of $9 million. The company will take on a construction loan from HUD for $32.5 million. Caliber is co-developing this project with Cardinal Capital Management, a vertically integrated real estate development company that specializes in multi-family and workforce housing. 

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