A federal investigation has led American Ventures, an Austin-based real estate developer, to request a delay from the San Marcos City Council on a final vote regarding its proposed $500 million mixed-use project. The 101-acre development was slated for land near East McCarty Lane and Rattler Road in San Marcos.
The postponement comes after American Ventures disclosed in August that it is under investigation by the Securities and Exchange Commission (SEC). According to the Austin Business Journal, SEC investigators have questioned both current and former employees as well as investors about the company’s business practices. The firm had been seeking taxpayer-funded incentives through the creation of a public improvement district for the site.
Plans for the project included three phases with completion expected by 2031. City documents estimate that once finished, it could generate $66.1 million in sales and property taxes for Hays County and $145 million in various taxes for San Marcos. In addition to this project, American Ventures also has an agreement with Elgin, east of Austin, for a 60-acre mixed-use retail development.
No charges have been filed against either American Ventures or its CEO Shravan Parsi at this time. However, sources indicate that interviews with federal investigators have been ongoing since October of last year. Investigators are reportedly looking into how investor funds were used—specifically whether any money was diverted to personal expenses by Parsi—and whether fees charged matched what investors were told. There are also questions about possible political donations made using investor funds.
Christopher Yust, associate professor of accounting at Texas A&M University, said: “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 went toward purchasing developable land—including sites in Elgin and San Marcos—as well as projects in Dallas and along South Congress Avenue in Austin. The inquiry includes questions about “double closings,” where one entity buys land before transferring it to another entity—a process that can incur additional title fees—and whether these transactions were properly disclosed to investors.
American Ventures’ previous projects include The Draper in Garland near Dallas—a 155-unit residential development financed with a HUD loan at a 2.96 percent interest rate over forty years.
If the San Marcos project does not proceed beyond this delay, plans would be left unfinished for nearly 1,200 multifamily units, 44 townhomes, 120 build-to-rent homes, a hotel with 130 rooms, approximately 145,000 square feet of office and retail space, plus an option allowing the city to buy several acres intended for a future baseball stadium.
