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The Real Deal Los Angeles

Trump’s tax law could help raise office tower in Santa Ana

One Broadway Plaza is in one of CA’s Opportunity Zones
January 25, 2019 09:00AM

Developer Michael Harrah and the site of proposed One Broadway Plaza (Credit: Getty Images and Google Maps)

A 37-story tower in Santa Ana, which was first proposed 20 years ago, could be among the latest projects to benefit from the Opportunity Zones created under President Trump’s tax overhaul.

Developer Michael Harrah is making a second push to find investors and tenants for his stalled projects, including a high-rise at North Broadway and 10th Street, the Orange County Register reported. The projects were delayed for years because of size and cost, but the new tax plan could make the property more valuable.

The proposed 493-foot-tall office tower, called One Broadway Plaza, would cost $450 million and take two years to complete. It is located in Santa Ana’s Opportunity Zones, which create significant tax benefits for investors thanks to the tax overhaul.

The designation allows owners to delay capital gains taxes from earlier transactions or investments in economically depressed areas. Former Gov. Jerry Brown designated nearly 900 tracts as Opportunity Zones, including much of downtown Santa Ana.

Harrah has been trying to get financing for the Santa Ana tower for almost 20 years. He has invested more than $90 million in the “shovel-ready” development.

It’s one part of his “mini-city” plan, which would stretch to the recently vacated, 173,000-square-foot Orange County Register site on Grand Avenue. The entire plan would include 2.35 million square feet of mixed-use redevelopment, and cost about $1 billion. He acquired that property for more than $60 million in separate transactions in 2014 and 2016. [OC Register] — Gregory Cornfield