Nate Hobba and 433 W. 5th Street (Credit: Google Maps)
Opportunity Zone projects continue to pop up in Los Angeles, with the latest — a 99-unit apartment complex — set for San Pedro.
Nathan Hobba of South Bay Developers LLC filed plans for the development, which would also seek to take advantage of the city’s Transit-Oriented Communities program. The project, planned for 448 W. 5th Street, would include eight units set aside as affordable. It would have 2,000 square feet of ground-floor commercial space.
Much of downtown San Pedro has been designated as a federal Opportunity Zone. Last month, Starwood Capital Group filed for a 375-unit Opportunity Zone project there via its massive $500 million Opportunity Zone fund.
The federal program allows investors to pour untaxed capital gains into development projects in thousands of distressed areas around the country. Investors receive tax discounts on those capital gains and can completely avoid taxes on them if they hold the property for a decade. Firms like Starwood, Brookfield Property Partners and SkyBridge Capital are seeking to raise hundreds of millions of dollars to invest in properties through their funds.
The 5th Street project also seeks density bonuses and other incentives through the L.A.’s Transit Oriented Communities program, which provides those incentives in exchange for setting aside affordable units in market-rate projects. Eight of the units would be set aside for “extremely low-income” renters.
The firm purchased the property two weeks ago for $3.5 million.