The Summit at Rivery Park has been more than six years in the making for Jeff Novak.
But the $225 million mixed-use development, the first of its scale in Georgetown, is also a harbinger for the fast-growing city about 30 miles north of downtown Austin that was mostly rural farm and ranch land a couple of decades ago.
Georgetown had a population of about 16,000 in 1990. That had climbed to more than 67,000 by 2016, a surge driven by the area’s relative affordability during a period of sustained economic migration to Central Texas — the city, the seat of Williamson County, remains one of the fastest-growing in the country.
Novak, founder and CEO of Novak Brothers LLC, is one of the real estate developers behind a new wave of construction that is changing Georgetown’s reputation from a bedroom community to one with a more diversified mix of residential, retail and industry.
The 32-acre Summit is coming to life on a hill northwest of the county courthouse, overlooking the San Gabriel River. The second phase, encompassing 60,000 square feet of ground-floor retail development plus some offices, is now open for business. Retail tenants include Woops bakery, which opened in early September, and Orangetheory Fitness gym coming soon. Another tenant, Spa Luxe, will open in early 2018.
There are also four restaurant sites in the second phase: two are under lease, including a location of Georgetown-grown BB’s Home Cooking, while negotiations continue on the remaining sites.
Construction is about to begin on the third and final phase of The Summit, just south of the second phase with more ground-floor retail plus urban lofts.
“It’s interesting to see people now walking through the entire community, from the south side, which is where our multifamily element is, to north side where our single-family brownstones are,” Novak said. “I really think once we get our first couple of restaurants open… I can see it standing out as a really neat lifestyle center.”
Long history
Various developers have tried over the years to build on the land overlooking the city-owned Rivery Park. A previous company, LedgeStone Group Inc., shepherded the creation of the Rivery Tax Increment Reinvestment Zone to funnel some of the property tax revenue collected in the area back into development — up to $25 million. Novak became involved in the project in 2009.
Then the great recession hit and the project was put on hold. Novak eventually took the lead on the development and closed on the land purchase in October 2011.
Novak still had to convince some major players to partner with him on the venture. He accomplished that by luring Houston-based development giant Hines to help build the Sheraton Austin Georgetown Hotel & Conference Center, plus Starwood Hotels & Resorts Worldwide to run it. Starwood is the Connecticut-based Marriott subsidiary that operates some of Austin’s hottest hotels, including the Westin Austin Downtown and Sheraton Austin at the Capitol.
Construction of The Summit began in earnest in 2015. The first phase included 114 single-family urban homes in the Texas Brownstones and the 223-unit Rivery Park Luxury Apartment Homes, which are now about 94 percent occupied, plus the Sheraton, which opened in July 2016.
Pieces come together
To finance the project, Novak raised some traditional debt from capital markets as well as funds from the federal EB-5 visa program, which grants immigrant visas to foreigners who invest at least $1 million apiece in U.S. businesses. Novak said the EB-5 funds made sense for a development that took years to bring together but cautioned they won’t work for everyone.
“You’ve got to get on board with EB-5 well in advance of the actual development,” he said. “It doesn’t make a lot of sense all of the time, but it makes a lot of sense nowadays as a bridge if you can include it in the capital stack early on.”
Novak said Novak Brothers has kept its equity stakes high in the various pieces of The Summit, including 96 percent ownership of the hotel: “One of the things we were committed to from day one was being partners and developers and investors, so we could control the experience.”
Novak is a former NFL lineman who after retiring from professional sports became a real estate entrepreneur. He ran a real estate marketing and sales agency before starting Novak Brothers in 2008 with sibling Jack Novak; a third business partner, Jim Cramer, serves as company president. Other projects include Howard Ranch, a small custom-home community north of Wimberley in the Hill Country, and The Preserve custom-home community in Georgetown.
The three are watching the biggest project in the history of their full-service real estate development company come to fruition.
“We wanted to create something that we didn’t have yet in Georgetown, with a four-star hotel and a dining and lifestyle experience that you can only find in this kind of infill project,” Jeff Novak said.
