PACE Equity recently completed funding $4.3 million for the construction of a new Hyatt House hotel in Rochester, Minnesota. It is notably the first Opportunity Zone fund project in the nation to include PACE funding to date. The new federal Opportunity Zone program, part of the December 2017 Tax Cuts and Jobs Act, was established to spark development in federally designated areas by offering investors generous tax incentives.
“Using PACE Equity funding to replace more expensive preferred equity to complete our capital stack was a game changer for us,” said Ebbie Nakhjavani, the chief executive officer of EKN Development Group. "PACE Equity’s capital not only boosted our overall returns, but their turnkey process and engineering prowess made working with them an easy choice.”
The 175-key extended-stay hotel will be located at 315 First Ave., near Mayo Clinic’s downtown campus. The property was the site of the former American Legion Post 92, where Mayo Clinic founders William J. Mayo and Dr. Charles H. Mayo were members in the early 1900s. The new Hyatt House will serve the patients and clients of Mayo Clinic, filling a great need in the area.
“For us to be part of the process with two quality developers has been a great opportunity. More importantly, to contribute to a project that is transformative in terms of growing Mayo Clinic’s health care campus is very fulfilling. We look forward to many more,” said PACE Equity Vice President of Hospitality Ron Adachi.
Ground was broken for the Rochester Hyatt House Hotel on April 11, 2019, and the hotel is expected to be complete in summer 2020.