Gadsden Company Announces Construction of Bautista Apartments in Mercado District

Joint-development partners PEG Companies, a vertically integrated commercial real estate investment firm known for their innovative projects and The Gadsden Company, a family-owned real estate investment and development company with a core focus on community development (including Tucson’s Mercado District) came together alongside the community to celebrate the ceremonial groundbreaking of The Bautista Apartments, an upscale, transit-oriented mixed-use development located along the historic Santa Cruz River.

At just under 500,000 total square feet, the $110 million Bautista development consists of 256 spacious residential units—each one boasting a balcony and large living space. The development also includes 16,000 square feet of ground-level retail and restaurant space, underground parking, interior courtyards, and many leading-edge amenities, including a resort-inspired pool and spa and an enhanced river park element with a public walkway that will run through the center of the project, connecting the rest of the Mercado District to the Santa Cruz River. An additional amenity of the project will be a linear park along the Santa Cruz River that will be paid for from construction sales tax.

“This project represents a collaborative public/private partnership,” said Trevor Ellis, PEG acquisition and development manager. “The Bautista is the product of a creative process starting back in 2018, between us as private developers, the City of Tucson, and Rio Nuevo which provided a $2.8 million investment split between cash and sales tax rebates.”

The development also leverages a significant portion of private equity from investors who will benefit from tax breaks through the federal government with the property being inside a Qualified Opportunity Zone. “This is a federal designation for certain census tracts in each state to spur economic development and job creation,” said Gadsden President and CEO Adam Weinstein. “The designated QOZ overlays the entirety of our Mercado District properties. Bautista is in that zone.” He added that The Bautista Apartments have become the first QOZ-leveraged investment of its kind within the Rio Nuevo District.

 “This project is unique for a few reasons,” Ellis said. “One is that it’s a public-private partnership here in Tucson, a partnership both on the developer side with the PEG Company and the Gadsden Company. But we also partnered Rio Nuevo here in Tucson and the city of Tucson to really make this project work. From a project standpoint, this is a unique project; it fits within the ecosystem here that’s already been developed, it has a very historic flair in the design of the buildings, each one of the unit’s has its own balcony that allow tenants to live both indoors and outdoors. I want to thank the development partners Jerry Dixon and Adam Weinstein and the Gadsden Company as a whole. Their vision and passion for the Mercado District and Tucson in general is unrivaled.”

The Bautista project is designed to acknowledge the unique status of the historic Santa Cruz River plain, an area with a history of settlement and agriculture that goes back several thousand years. 

Mayor Regina Romero said, “The Tohono O’odham people, and the Pasqua Yaqui people have lived in the Sonoran Desert along the Santa Cruz River for thousands of years. It’s important to acknowledge that, because… this land is sacred for us. The Bautista is yet another opportunity to create wonderful development in our city, to continue developing what Gadsden has developed here on the west side, and I’m so happy to be here, to partner in this, and to celebrate another project coming out of the ground.” 

Ellis added, “There’s a history here that the people of Tucson are connected to, and we hope that the Bautista Apartments continues that historical connection.” 

Weinstein frames The Bautista in a larger, ‘New Urbanism’ philosophical/design framework about the future of growth in Tucson.

“When we envision the future of Tucson, we see connections,” he said. “The Mercado District’s tree-lined streets, buildings, plaza and modern streetcar will bridge the gap between downtown’s east and west. But our work also has a further reaching goal: the bridge the gap between Tucson’s growth and our diverse community. Our vision is a reunion of our city’s urban traditions, culture, and ecological values with our creative, technological and structural development.”

The Bautista will anchor the far east side of the Mercado District off Linda Ave., between Congress and Cushing Avenues. A central, tree-lined paseo is being developed that runs from the plaza in the Bautista, across a future development (currently a parking lot) in the middle of the neighborhood, and across Avenida del Convento through the Monier Apartments and beyond. The paseo is designed as a pedestrian through-way that ties together the entire 30-acre Mercado District, from the Santa Cruz River to the residential neighborhoods on the west side of the district.

The Bautista Apartments, which will be divided between two five-story buildings with the central plaza between them, and to be connected with a bridge, are on track for an August 2025 completion date. With EMJ Construction recently having mobilized on-site, project leaders celebrated the commencement of construction with a ceremonial groundbreaking on Mar. 1.