A federal investigation has led American Ventures, an Austin-based real estate developer, to request a delay on a final vote by the San Marcos City Council regarding its proposed $500 million mixed-use project. The postponement comes after the company disclosed in August that it is under scrutiny by the Securities and Exchange Commission (SEC).
The SEC’s inquiry involves interviews with current and former employees as well as investors of American Ventures. According to reports from the Austin Business Journal, investigators are examining the firm’s business practices. The project in question was seeking taxpayer-funded incentives through the creation of a public improvement district on land near East McCarty Lane and Rattler Road in San Marcos.
Plans for the 101-acre development include three phases scheduled for completion by 2031. Project documents estimate it could generate $66.1 million in sales and property taxes for Hays County and $145 million in various taxes for San Marcos over time. In addition to this proposal, American Ventures has also entered into an agreement with Elgin, east of Austin, for a separate 60-acre mixed-use retail project.
No charges have been filed against American Ventures or its CEO Shravan Parsi. However, sources indicate that federal interviews have been ongoing since October of last year, focusing on financial management, business practices, and specific actions by Parsi. Investigators are looking into how investor funds were used—particularly whether any were spent on personal expenses—and if fees charged to investors matched initial disclosures. There are also questions about possible political donations made using investor money.
Christopher Yust, associate professor of accounting at Texas A&M University, commented: “Businesses have some leeway with how and what they use funding for from investors, so long as those practices are clearly stipulated to them.”
SEC filings show that since July 2023, Parsi and American Ventures raised $36 million from 236 investors. These funds were allocated toward purchasing developable land in Elgin and San Marcos, redeveloping a site in Dallas, and acquiring property along South Congress Avenue in Austin. The investigation is reportedly examining whether “double closings”—where one entity buys land then transfers it to another entity—were used without full disclosure to investors.
American Ventures’ past projects include The Draper at 217 Garland Avenue in Garland near Dallas—a 155-unit development financed with a long-term HUD loan at a fixed interest rate.
If the San Marcos project does not proceed as planned due to regulatory delays or other issues arising from the investigation, nearly 1,200 multifamily units, dozens of townhomes and build-to-rent homes, a hotel with 130 rooms, significant office and retail space, plus potential city acquisition of land for a baseball stadium would remain unbuilt.
