Archive for November, 2007

AZ Republic – 6 auction on tap for NE Valley trust land

Peter Corbett
The Arizona Republic
Nov. 29, 2007 11:29 AM 
 

SCOTTSDALE – State trust land will be in play next year in the Northeast Valley with close to a dozen auctions planned for more than 2,400 acres. That includes a key development site on the Phoenix side of Scottsdale Road, and nearly 1,700 acres that Scottsdale has targeted for its McDowell Sonoran Preserve.

The Arizona State Land Department on Jan. 23 will auction 112 acres in a 99-year lease. The Paradise Ridge parcel, valued at $32 million, is northwest of Loop 101 and Scottsdale Road.  Westcor has long targeted the land for a shopping center it calls Palisene but other developers are interested in the prime commercial land.An Oct. 29 auction of the land was postponed after a dispute over the bidding rules that has since been resolved, said Jamie Hogue, deputy state land commissioner.

“We’re ready to go forward,” she said. “We won’t know until it happens but we are hoping that bidders will show up.”

Site still needs water and roads

A new agreement was drawn up requiring the winning bidder to deposit $20 million for water, drainage and road improvements for the site. The Paradise Ridge site is one of three that developers are targeting for major mixed-use developments north of Loop 101 from Scottsdale Road west to 56th Street.

In addition to Westcor’s Palisene project, the Thomas J. Klutznick Co. is making progress on CityNorth on 144 acres northwest of the freeway at 56th Street.

Plus, DMB Associates is planning One Scottsdale northeast of Loop 101 and Scottsdale Road. Dial Corp. is building its new headquarters at One Scottsdale and plans to open it next fall.

Both DMB and Klutznick have expressed interest in the Paradise Ridge site.

Rawhide Wash also is in the mix

The other major parcels of state trust land coming up for auction in Scottsdale next year are four sections of nearly 1,700 acres that stretch from Happy Valley and Scottsdale roads northeast to east of Pima Road and Dixileta Drive. Scottsdale wants the land in the Rawhide Wash for its preserve but it must bid against homebuilders. The value of the land has not been established and no date has been set for the auction.

Carla, the one-named activist and former executive director of the McDowell Sonoran Conservancy, said the focus needs to be on getting a state-land reform initiative on the ballot in 2008.

That would allow Scottsdale and other Arizona communities to have a clear picture of the costs to acquire state trust lands like the Rawhide Wash for open space, she said.

Four sites planned for auction

The other four parcels of state land in Scottsdale up for auction next year include: • 10 acres south of Bell Road at 98th Street that has zoning for hotel.

• 17.87 acres southwest of Pima Road and Thompson Peak Parkway with commercial zoning.

• A pair of 30-acres sites north of Deer Valley Road and east of Pima with residential zoning.

• 16.81 acres near the Pinnacle Peak trailhead that is identified as a resort site.

All planned for auction in 2008

No appraisals or auction dates have been released for any of the four parcels, but they are targeted for disposal in 2008. The Arizona State Land Department will also test the land market Dec. 6 when it auctions 413 acres near Deer Valley Drive east of 32nd Street with bids starting at $100 million.

An auction to least 43 acres just west of the Scottsdale 101 shopping center is also planned next year.  

www.theholmgroupaz.com

AZ Republic – Mirabel Club honored by 2 golf mags

The republic | azcentral.com
Nov. 28, 2007 06:08 PM
 SCOTTSDALE –

The Mirabel Club in Scottsdale recently was honored in the fall issues of two prominent national golf publications as being among the top private golf clubs in North America. Golf Digest Index, a special limited distribution publication by Golf Digest tailored to its top readership demographic tier, named Mirabel among “America’s 50 Best Modern Golf Clubs.” The rankings were compiled by Golf Digest’s panel of 800 course-raters and were limited to golf courses built between 1990 and 2005.

Two other private Scottsdale clubs, Estancia and Whisper Rock, appeared on the list.


Meanwhile, LINKS magazine, one of North America’s leading golf lifestyle publications, named Mirabel among “America’s 100 Premier Properties.”
“We couldn’t be more honored,” said Bob Lomax, director of sales for Mirabel. “We always intended Mirabel to be an intimate, family-oriented private club experience where members would be welcomed by a staff who took the time to get to know their individual preferences and interests.

“We have an outstanding golf course and have developed a wonderful selection of amenities and services to give our members a superior lifestyle. Being recognized by these two prominent national publications is terrific feedback to let our staff know they are serving our members well.”

Mirabel, located two miles east of Pima and Cave Creek Roads, was developed by Scottsdale-based Discovery Land Company. The club features a Tom Fazio-designed 18-hole golf course and a Frank Lloyd Wright-inspired Desert Lodge Clubhouse.

In addition to world-class golf, amenities at the club include a state-of-the-art fitness center, offering personal trainers and the most current cardio and strength training equipment, as well as a movement studio for aerobics, yoga and Pilates classes. There also is a private day spa that specializes in massage therapy, skin care treatments, salon services, and other innovative and restorative spa services.

Mirabel also offers championship clay tennis courts in a beautiful tennis garden, a spectacular resort-style swimming pool with private cabanas and personal attendants, and an immaculately landscaped event lawn that includes areas appropriate for bocce ball, croquet or other leisure activities, as well as outdoor picnics, parties, and social functions.

A limited number of Mirabel memberships, as well as choice home sites and finished custom homes, are available without the requirement of property ownership. 

AZ Republic – 2 land auctions, 1 hot the other cold

Michael Clancy
The Arizona Republic
Nov. 28, 2007 10:07 AM
 One upcoming state land auction promises to be the land-auction equivalent of watching paint dry.

The other may well be like watching the most important game of the season.

Both auctions by the Arizona State Land Department already have been rescheduled once, and it is possible one of them will have to be done yet again.  That auction failed to draw a single bidder the first time State Land Department officials tried to sell it Nov. 1.

It involves 400 acres of what seems like prime residential land just northeast of the Loop 101and Cave Creek Road. On the south is the Reach 11 Sports Complex. One to the east is the northwestern corner of Desert Ridge. To the north is a mobile home park and a cemetery, and another cemetery borders the western side.

The land likely will be zoned for residential use, much like the adjacent Desert Ridge neighborhoods.

But the Valley’s housing slump has kept potential bidders away.

The other auction already has seen fireworks.

It features the first sale in an area the state calls Paradise Ridge – 2,200 acres of undeveloped desert between Desert Ridge’s eastern border and the Scottsdale line, between Loop 101 and Pinnacle Peak Road. The 112-acre site most likely will become a mixed use development featuring a major shopping center.

One potential bidder, the Thomas J. Klutznick Co., protested the initial terms of the auction, originally scheduled for Oct. 29, leading to its postponement. The protest focused on preferential development rights and infrastructure requirements.

Westcor, the shopping center developer, had the inside track on the land, thanks to agreements with the Land Department. In exchange for services rendered to set up the auction, Westcor has the right to match the highest bid.

An attorney for Klutznick said in a letter to State Land Commissioner Mark Winkleman that the preferential right should have expired, citing a 10-year period that he claimed ended in April 2006. The company also argued that infrastructure requirements were not adequately spelled out.

Assistant Land Commissioner Jamie Hogue said Monday that department officials reviewed and reworked the infrastructure requirements, coming up with a detailed 48-page document, and now are requiring a $20 million escrow deposit from the winning bidder.

But it made no changes to the preferred right.

Marla Ellis, a spokeswoman for the Klutznick Co., said executives are reviewing the requirements.

The auction is scheduled for Jan. 23.

AZ Republic – Kierland Commons captures spirit with ‘Miracle on Main Street’

Dolores Tropiano
The Arizona Republic
Nov. 23, 2007 08:19 AM
 Storytime with Mrs. Claus.Live holiday music.

And free horse-drawn carriage rides.
All of that combines to make Christmas at the Kierland Commons truly magical. But there is more.
This year, Kierland Commons has put together what they have cleverly coined Miracle on Main Street, a series of events that take place in and around the Center Plaza of the marketplace located at Scottsdale Road and Greenway Parkway.

Even if you can’t afford to actually purchase anything at the upscale, outdoor shopping district, visiting during the holidays is an experience that doesn’t compare to being in a mall.

“I like to be able to go outside to go from store to store and not be enclosed in a mall,” said Joan Maher, 63, of north Scottsdale, while purchasing a toy for her grandchild. “And it’s not as big as the mall.”

The festivities kick off from noon to 9 p.m. Saturday with children decorating gingerbread cookies, photos with Santa, story time with Mrs. Claus, complimentary horse-drawn carriage rides and live holiday music. The 22-foot Christmas tree will be lit at sunset that same day.

They continue from 3 to 9 p.m. Dec. 1, 8, and 15.

Bright, colored lights will be strung across the street with large wreathes hung up along the 38-acre development.

Kierland combines 70 high-end specialty retailers including Crate & Barrel, Restoration Hardware and Victoria’s Secret with restaurants, office and residential space.

“It’s a beautiful environment,” said Alain Helling, store manager for Chico’s at Kierland.

“The ambiance with the lights make it very romantic. They add new lights every year on the palm trees. It’s just a gorgeous, romantic environment,” Helling continued.

The open marketplace, with cobblestone pavers and eye-catching storefronts, give it a different feel from other shopping destinations.

“It’s more calming than indoor malls. Even if you just walk around, it’s more peaceful,” Helling said. “It’s a slower pace.”

Besides valet parking, this year, the mall’s biggest perk is their “Curbside Gift Card Express” offered at the management office at western end of the street.

The Visa card is good at all Westcor shopping destinations including Scottsdale Fashion Square.

“Our customers love it because they don’t even have to get out of the car,” said Devon Hoffman, marketing manager at Kierland. “It’s the best thing ever because other malls have one hour waits. Here they can pull up on their lunch hour, have a concierge run in and get the card and pull out. It is the ultimate experience and an extra level of service.”

The unique selection of stores also helps put truly unique gifts within reach.

Artafax is selling silver, themed tree stands including a gambler’s tree with roulette tables, dice, cards and coins from $6 and up for ornaments and an alcohol and smoking tree with beer bottles and fat cigars dangling from the branches.

Restoration Hardware is a favorite destination for unusual stocking stuffers including a personal digital alcohol detector that fits in a pocket for $45 and a halitosis detector for $22.

Who could ask for anything more?  

If you are looking for a home in the Kierland area click here: 

AZ Republic – Prime deal, prime debacle for Rocky Point Investors

Dennis Wagner
The Arizona Republic
Nov. 25, 2007 12:00 AM 

 PUERTO PEÑASCO, Sonora – U.S. investors, mostly from Arizona, have poured more than $100 million into beachfront homes, motels and land in the Sonoran vacation retreat known as Rocky Point, only to see their cash swallowed up by Mexican and U.S. developers who failed to build the projects. The real-estate debacle is raising questions about the security of Americans’ property investments south of the border, with Arizona’s two U.S. senators firing off letters of complaint to the Mexican ambassador.Known as Playa Norte, or North Beach, the development in question has a projected value in the billions of dollars and covers 7,500 acres, an area the size of Queen Creek. It lies at the end of a dirt road about 12 miles from this Mexican tourist town, where desert dwellers enjoy the glimmering Gulf of California.  The attraction: Beachfront residential lots that sold for $40,000 a decade ago now rival San Diego prices at $500,000, without the house.Scores of families and retirees have mortgaged homes or risked life savings for a piece of Margaritaville. A number of American developers also bought prime seaside land, planning to build and sell vacation homes to other Arizonans.All believed literature published by government agencies, including the Arizona-Mexico Commission, stating that Mexico’s fideicomiso, or bank trust, system safely ensures property rights to Americans.The 14-year-old trust system has certainly worked for thousands of U.S. citizens who bought Sonoran properties without problems. The buyers acquired the property under renewable, 50-year leases that are held in bank trusts. But at North Beach, master developers in Mexico began raking in U.S. dollars in 1998, then hunkered down amid multiple lawsuits that have clouded title and blocked all construction. The buyers have not received ownership papers or refunds. The developers began work on some projects, but say the legal obstacles forced them to stop.

The losses have soured investors on acquiring stakes in Mexico and have shown that even U.S. buyers may face paralyzing disputes and potential fraud, along with their own mistakes.

“Put in your headline: ‘Don’t invest in Mexico,’ ” said Matt Neimeier, a 35-year-old software engineer who paid for a fourth-floor condominium overlooking the sea. “It’s not worth it. I was going to have to file bankruptcy in a few months. It’s just sucking me dry.”

Neimeier said there was a 30 percent savings for full cash payment, so in 2005 he took a second mortgage on his Phoenix house and cut a check for $250,000 to a U.S. developer in North Beach. Title papers never materialized. The half-built condo tower stands amid sand dunes with rusted rebar jutting skyward. Because of Arizona’s real-estate slump, Neimeier’s house is now worth less than the mortgage debt.

Another investor, Lowell Provancha, a retired Nebraska plumber, said he spent $750,000 on land and casitas in North Beach in 1999, persuading his children and a priest in the family also to invest.

“What is happening at the North Beach development in Puerto Peñasco is not only unethical and immoral but … illegal,” Provancha wrote in an August letter to Gov. Janet Napolitano. “The property has been paid for, and we need to be protected under the NAFTA free trade agreement.”Half-built condos With beautiful blue waters and refreshing breezes, North Beach is among the most gorgeous properties on the northern Gulf of California. It is also the last vacant expanse near Puerto Peñasco, extending along 3 1/2 miles of oceanfront, master-planned for thousands of hotel units, condos and houses. Promotional materials for just one project show a 1,000-acre lagoon with seven islands, a marina, six golf courses, equestrian trails and other amenities.Today, paint peels from model casitas left empty except for occasional squatters. Partially built residential towers bake in the sun. A golf course – without fairways, greens or flags – resembles a giant sand trap. U.S. and Mexican citizens have filed at least a half-dozen civil actions in Mexico accusing parties of fraud or breach of contract.U.S. investors have begged for help from the governors of Arizona and Sonora, members of Congress and the U.S. State Department. They’ve sought investigations by the state Department of Real Estate, the State Bar of Arizona and the Arizona-Mexico Commission.In March, U.S. Sens. John McCain and Jon Kyl became so alarmed that they sent a letter to Mexican Ambassador Antonio O. Garza Jr., noting that just one section of North Beach has a potential value of $700 million. “It does seem that if, in fact, U.S. investment in Mexico is being disrupted by illegal maneuvering, it could have important ramifications that go beyond this particular case,” the letter says.

Other than in court, no U.S. or Mexican government authority has taken responsibility or action to unravel the problems.

Mexican attorneys tell investors the legal system is so snarled, and so tainted with corruption, that nothing can be done. Miguel Tapia, an Hermosillo lawyer who has represented at least two groups of American buyers in North Beach, used a Spanish-language proverb to explain: “A tree that starts to grow bent will never straighten out.”

Steve Seymoure, former president of Pulte Homes in the western United States, faces big losses and outraged Arizonans who paid him $11 million for getaways. Seymoure, a Valley resident, also invested $11 million on land, planning and construction at Playa Azul, a seaside project to feature four condo high-rises. Today, only one half-built tower looms over empty sand.

“It sure as hell didn’t go the way I wanted it to,” Seymoure said.

Developers at odds

Puerto Peñasco has an especially shady history of land disputes dating to the 1940s. The main cause is a Mexican law that prohibits foreigners from owning property within 31 miles of the coast or 62 miles of the border. To circumvent that statute, Mexican dealers “sold” property to Americans with a handshake and a wink while drawing up papers as lease contracts. Years later, after homes were built, entire communities got disrupted by legal battles. Some Mexican dealers never owned the land they sold. Others decided to reclaim property based on expired leases. In some cases, the problem lingered long after 1993, when the government authorized bank trusts to allow property purchases in the restricted zone.The legal change also encouraged development at places like North Beach, where brothers Everardo and Reynaldo Grijalva owned a huge tract. In 1996, they joined forces with a father-son team of financiers from Spain, Juan Luis Martin Sr. and Jr., to create a master-planned community. The partners created a trust and started selling property through Playa Norte S.A., a development company run by the Martins.But problems arose in Playa Dorada, a subsection where Grijalva family members had sold lots to Americans years earlier. Faced with eviction by Playa Norte, the homeowners formed groups, hired lawyers and sued Playa Norte and the Grijalvas in 2001. After two years of legal wrangling, most of them negotiated settlements and wound up with bank trusts.

Meanwhile, the Grijalvas and Playa Norte were involved in other legal actions beginning in 1999. As the litigation dragged through Mexican courts, unwitting Americans continued investing in North Beach, many signing purchase contracts after a U.S. company issued title insurance.

Years elapsed, and virtually nothing got built. Americans desperately sought answers and refunds. They hounded sales agents, investigated the developers and hired lawyers.

In 2004, the Grijalvas and Martins became adversaries, with the Grijalvas suing their partners. Nearly every project in North Beach was named as a co-defendant. A judge ordered a freeze on all sales, construction and title processing.

The Grijalvas said their partners violated an agreement to develop North Beach and tried to transfer giant chunks of the land into other companies.

Vladimir Saldana, a Mexico City public-relations representative of the Martins, denied the allegations, adding that his clients have spent $100 million trying to develop North Beach. As Rocky Point real-estate values skyrocketed, he said, the Grijalvas sued because they were unhappy with the amount of money they were to receive under the trust agreement.

The Grijalvas could not be reached for comment. Their attorney, Alfredo Vergara, said the Grijalvas had been wronged by the Martins, but he did not respond in detail to questions.

Saldana and others contend that officials in the Sonoran government have joined with the Grivaljas to wrest control of the property, but they admitted there is no proof.

“The development wasn’t built. But why? Because of the legal dispute the Grijalvas created,” Saldana said. “We understand the frustration of the U.S. clients. They have a perfect right to be angry. But I can tell you that North Beach (development company) is doing everything it can.”

The two sides also challenge each other’s credibility. Saldana noted that Vergara served time in an Arizona prison for a narcotics conviction. Vergara pointed to Mexican news reports that say Juan Luis Martin Sr. was arrested in Cabo San Lucas 13 years ago on suspicion of development fraud. Saldana described the event as a kidnapping and said there was no trial, let alone any conviction. “The detention was totally illegal. He was accused of fraud, and there was nothing proved,” Saldana said. Meanwhile, most American investors, dizzied by language barriers and the legal intrigue, don’t know what to think.

‘It looked spectacular’

Howard and Maddy Israel moved into a manicured Ahwatukee neighborhood in 1980. It’s a nice getaway for retirees but hardly an ocean paradise. So the Israels, now in their 70s, were fascinated in 1999 when friends told them about incredible real-estate opportunities just outside Puerto Peñasco.In brochures, “it looked spectacular,” Howard recalls.The prices were even better. At the time, seaside lots were going for $18,000. A two-bedroom condo with a garage and golf privileges was $35,000, and the developer would manage vacant units, guaranteeing rental income for investors.

But there was a catch: The bargains were available only with a full-cash payment. Still, after meeting with a real-estate agent at plush offices in Rocky Point, the Israels paid up from their retirement fund.

Eight years later, they have no property in Rocky Point. Their money is gone. All that remains are legal fees and a determination to warn other Americans.

“They gave us every legal paper you could ask for,” Maddy said. “If these dummies . . . would have just followed up on the development, they would have made millions.”

The Israels wrote checks to a Playa Norte subsidiary that is apparently not registered in Mexico. The sales contracts were signed by a manager who cannot be found. Appeals for a refund were stonewalled by a sales agent who canceled repeated meetings using the same excuse: Her mother had just died.

Investors form group

In desperation, the Israels contacted other investors and formed North Beach Investors Action Group, hiring attorneys in Tucson and Hermosillo. The lawyers recommended negotiation because litigation would create more delays and costs. A Mexican attorney named Raul O’Farrill entered the picture, designated by Playa Norte to process bank trusts. O’Farrill, with an office in Phoenix, has tremendous bona fides: He is a member of the Arizona-Mexico Commission. He was designated by the Arizona Supreme Court as “foreign legal counsel,” authorizing him to practice Mexican law in Arizona as a member of the state Bar.O’Farrill also has had multiple roles at North Beach: He owns a percentage of one development project. He and his law firm are legal counsel for three developments. He was mediator and escrow agent in the dispute over Americans’ homes in Playa Dorada.But mediation efforts went nowhere. Maddy Israel still has no bank trust. She is one of three North Beach investors to date who have filed state Bar complaints against O’Farrill alleging conflict of interest.

In an interview, O’Farrill denied any ethical breach and said he never acted as an intermediary between Playa Norte and Israel’s group. “I was not representing anyone,” he said. “I didn’t do any kind of work . . . I was just searching the possibility to fix the problem” without being retained by either side.

The State Bar dismissed all three complaints. In a written statement, Maret Vessella, deputy chief Bar counsel, said investigators did not find clear and convincing evidence of wrongdoing.

Only dead ends

Lowell and Kathy Provancha were so thrilled with prospects for Las Gardenias development in North Beach that they got their kids to invest with them in 1999. All told, the Provanchas clan acquired 17 vacant lots and several planned casitas – an $840,000 investment.Lowell Provancha, semiretired after building a plumbing business in Lincoln, Neb., said he and a partner planned to build 99 condominiums on some of the land.He admits the initial purchase was impulsive and “stupid.” The Provanchas attended a sales presentation in Lincoln and plopped down a deposit on two oceanfront lots, sight unseen. They were flown to Rocky Point in a private jet. They cruised on a yacht, sipped margaritas, enjoyed an airplane ride over the property and partied with Mexican officials in Hermosillo.

Kathy Provancha stared out at the Gulf of California from the couple’s casita near North Beach, shaking her head: “Looking back, we see how they had total control over us. And who wouldn’t like this? We’re right on the ocean, and we’re from Nebraska.”

The first investment led to others. But the Provanchas grew more careful, hiring an attorney and accountants.

In June of 2000, the Martins visited them in Lincoln with a notario, a specialized Mexican attorney, assuring that all paperwork was copasetic. The Provanchas completed the deals. They hired an architect, engineers and construction crews. They spent $112,000 on building plans and opened a sales office in Puerto Peñas- co.

Lowell Provancha still wears one of the T-shirts he had printed with the name of his new project: Northstar.

“This is all I’ve got left right here,” he said, “the shirt on my back.”For seven years the Provanchas begged, demanded and threatened in a fruitless quest for land title. They tried to figure out who is behind the development mess, hitting dead ends. Finally, they began sending piles of documents to authorities on both sides of the border. Every official they contacted passed the buck, stonewalled or claimed to be helpless.

“I’ve written to everybody,” said Kathy Provancha, “even the president of the United States. … We’re past the money part. I just don’t want to see someone else go through this.”

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AZ Republic – Residents, builders taking over Desert Ridge HOA

Michael Clancy
The Arizona Republic
Nov. 19, 2007 03:51 PM
 Desert Ridge residents and homebuilders soon will gain control of the homeowners’ association that covers the 5,700-acre master planned community in northeast Phoenix.

The Desert Ridge Community Association enforces the convenants, conditions and restrictions that govern development in the community. According to Jim Davis, former general manager of the association, the group also takes care of common areas in the community.

Control of the association has rested with the master developer, which in effect has controlled undeveloped state trust land in the area, since the Desert Ridge Specific Plan was approved in 1990. Master development rights are held by Northeast Phoenix Partners, and controlled by the Thomas J. Klutznick Co.
The sale of a 270-acre parcel last April flipped the equation, so that homeowners and homebuilders now control the majority of land.

“We are pleased to achieve this milestone in the growth of the Desert Ridge community,” said Daniel Klutznick, president of the Community Association and a vice president of the Klutznick Co. “This new era of Desert Ridge will allow the residents to carry forward the vision that we have worked for 17 years to ensure and foster.”

Elections of a new board of directors will take place at the association’s annual meeting in April.


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AZ Republic – Downtown condo craze cooling off

Jahna Berry and Matt Dempsey
The Arizona Republic
Nov. 20, 2007 12:00 AM 
 

The once-sizzling market for high-rise downtown Phoenix condos has cooled. Phoenix leaders have touted condo dwellers as a crucial part of downtown’s resurgence, saying residents would help sustain nearby shops and their foot traffic would inject the neighborhood with 24-7 vitality.

Now, plans to attract those condo dwellers have questions marks.  Although downtown Phoenix real estate has fared better than housing on the suburban fringe, developers say condo sales have slowed to a trickle.Among the signs of a slowdown:

• CityScape, a $900 million mixed-use development, added apartments to the development and pushed back plans for condos to later phases of the project.

• Some planned condo projects have become apartments, including Jet, a proposed 36-story development, and Alta Phoenix, a 375-unit project under construction.

• Nearly 30 of 165 condos at the Summit at Copper Square are unsold. At 44 Monroe, 130 are sold and 66 are for sale.

Countywide, condos sales are down 37 percent compared with the market peak in 2005, when more than 19,000 condos were sold.In the two downtown Phoenix ZIP codes, 85003 and 85004, condo sales and sales of luxury condos fell after 2005 but are up slightly this year. That uptick is probably misleading, Valley economist Elliott Pollack cautioned.

He said he believes those numbers may be skewed by buyers who signed contracts a few years ago for condos that weren’t built yet. Those sales didn’t make it to county rolls until recently when the unit was done, he added.

A national issue

The downturn in Phoenix’s downtown-condo market has plenty of company, said Doug Duncan, chief economist for Mortgage Bankers Association, a national industry group. “Arizona, California, Florida and Nevada are the four states which saw a significantly outsized growth in their supply (because of speculators),” Duncan said.

There are slow sales in downtown Reno, Las Vegas and Miami, and in California cities.

Phoenix leaders have shifted their focus as they wait for a rebound.

Phoenix is pushing to find ways to create more affordable housing downtown, even if that means apartments instead of condos.

“Obviously, one of the goals of our downtown-revitalization effort is to create that critical mass of people living in the downtown,” said John Chan, director of Phoenix’s Downtown Development Office.

He said he believes that will be “the catalyst for additional housing and the restaurants and retails and other amenities that everyone is looking for.”

But, at this point, the market will dictate when more high-end condos will be built, Chan said.

He added that it’s tough to say how the condo downturn will affect downtown development.

“It’s not going to have an impact, for example, when the next office tower gets built or when the next ASU biomedical building gets built,” he said.

Some of the plans for downtown retail may be affected, but to what extent, Chan said he isn’t sure.

Supply and demand

The condo market has supply-and-demand problems, experts say. On the supply side, there has been a tide of downtown Phoenix condo projects.

Since 2005, city figures show, 383 condos and townhouses have been built in the downtown core, between Seventh Avenue and Seventh Street, and Interstate 10 and the railroad tracks. More than 2,000 more are under construction or are in the pipeline.

With so much on the market, banks have toughened rules for developers who want to build new projects.

During rosier years, banks wanted developers to have pre-sale contracts for 20 to 30 percent of their units before construction. Now, that number is as high as 60 percent.

Concrete, drywall and construction-labor costs have shot up, said developer David Wallach, whose firm is building the Summit at Copper Square.

“Something that costs a couple thousand (in single-family home construction) in high-rise costs a couple of million.” Wallach said.

“The lack of stability of pricing has scared off a lot of people.”

On the demand side, luxury-condo developments are competing for a relatively small group of buyers in a saturated market.

Plus, banks have tougher requirements for who can qualify for jumbo loans, those for more than roughly $400,000, Duncan said. That’s the starting price range for many downtown luxury condos.

No ‘fast sell’

One side of the trend is empty-nester Mike Shaw, 48, a downtown pizzeria owner who recently closed on a two-bedroom unit in the Summit at Copper Square near Chase Field. Shaw’s new home will put him and his wife a few steps from his business and his beloved Diamondbacks. “I want to be downtown where the action is,” said Shaw, who is moving from Queen Creek.

On the other side is attorney Marshall Meyers, 35, who is trying to sell his family’s midtown luxury condo and is considering where to buy his next one.

To Meyers, the downtown condos, which range from the high $300,000s to beyond $1 million, seem overpriced.

He admitted he may not have to make that decision anytime soon.

“The market as, you know, is not great,” Meyers said. “I am not expecting a fast sell.”Signs of hope Many insiders are upbeat about the long-term prospects of the downtown Phoenix condo market.Unlike Florida and San Diego, which had a lot of downtown condos before the boom, Phoenix had only a few hundred units until a few years ago, developers say.

For the fifth-largest city in the U.S., that’s a relatively small number, which means that there is probably additional unfilled demand, Wallach said.

More units at 44 Monroe will sell after the development is complete and the units are move-in-ready, said Ryan Zeleznak, Grace Communities principle.

Zeleznak said he sells about two to three condos a month. Wallach, of the Summit at Copper Square, said he has not sold a condo in months.

Both men said the pattern is normal because many serious buyers aren’t interested until a condo tower is complete.

Because downtown condos are a relatively new concept in the Phoenix market, no one knows how much demand there is.

During the boom years, demand was distorted by investors who have now fled the market.

The condo slump has put a spotlight on Omega, a $100 million, 34-story, 204-unit condominium complex that Wallach plans to build near Second Avenue and Adams Street.

The sales office for Omega opens in the spring, and insiders are watching to see how it does.

Duncan, the Mortgage Bankers Association economist, said he sees the condo market as a bellwether for the overall housing market.

His mortgage-bankers group predicted the overall housing slump because of the price trend in condos. Now, the industry is keeping an eye on condos for signs of recovery.

“I always watch condos as the leading edge of where the market is going to go,” Duncan said.   

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AZ Republic – Valley resale market sees uptick in October

Ryan Randazzo
The Arizona Republic
Nov. 15, 2007 09:07 AM
 The volume of homes sold in the metro Phoenix area held up in October, but prices fell to the lowest level since May 2005.

The month brought 3,610 resales, up slightly from 3,050 in September, but still down year over year, according to the Arizona State University realty-studies program.

The median price across the Valley is down $15,000 year over year to $242,000, the report said.  Not only were buyers paying less, but the median square footage of homes sold increased 110 square feet, meaning they got more for their money than last year’s shoppers.

“That’s probably even truer of the new home market,” said Jay Butler, director of realty studies. “If you have the financing, you can buy a fairly nice home. There are a lot of opportunities out there.”

Low-end shoppers also found deals. More than a quarter of October’s sales went for less than $200,000, compared with just 16 percent of sales a year ago.

The October figure was still well below the 4,985 resale transactions recorded in October 2006.

The fourth quarter of the year is traditionally one of the slowest.

October’s resales brought the year-to-date total to 44,410 sales, which is well below the 57,375 for 2006 year to date and 97,170 sales for 2005 year to date.

Butler said that foreclosures and new homes are providing a competitive alternative to the resale home in many areas of the market. New home builders have been aggressively pursuing buyers through incentives such as specially priced up-grades, free pools and gift cards. Around the Valley According to a written statement from Butler, changes in median prices can vary tremendously throughout the Valley.

The following is from Butler’s report:

For the western suburbs, the median price has fallen from $240,000 in September 2006 to $211,500. On the other hand, homes in the North Mesa area have gone from last year’s $227,500 to $225,000. While some areas have declining prices, other areas are increasing or remaining fairly stable, especially the mature neighborhoods that are close to freeways, retail and schools.

Since the greater Phoenix area is so large, the median price can range significantly from $644,500 ($647,000 in September) in North Scottsdale to $175,000 ($185,000 in September) in the Maryvale area of the city of Phoenix.Townhouses and condos Much like the single-family market the townhouse/condominium market also showed some improvement in October with 710 recorded sales. This is better than the 685 sales of September, but below the 915 sales of a year ago. Townhouse-condominiums tend to be popular with seasonal visitors, investors and people seeking affordable housing. Unlike the single-family market, the median home price remained stable at $170,000 and comparable to last year’s $175,000. However, the median price has fallen greatly from the record $184,990 set in May 2007. Some of the price decline can be attributed to slowing of the higher priced condo conversion projects. Move-up sector The median square footage for a single-family home recorded sold in October 2007 was 1,745 square feet, which is larger then the 1,635 square feet for a year ago. The larger size further demonstrates the role of the move-up sector in the local housing market. In the townhouse/condominium sector, the median square footage was 1,070 square feet, which is smaller than the 1,120 square feet reported a year ago. Declines from a year ago In contrast to October 2006, recorded sales in the city of Phoenix decreased from 1,545 sales to 1,005 sales, while the median sales price decreased to $203,430 from $222,000 for a year ago. Since Phoenix is a geographically large city, the median prices can range significantly such as $175,000 ($185,000 in September) in the Maryvale area to $307,450 ($300,000 in September) in the Union Hills area. The townhouse/condominium sector decreased from 340 to 255 sales while the median price increased from $152,000 to $155,170.

While the Scottsdale resale home market declined from 420 to 280 recorded sales, the median sales price increased from last year’s $548,500 to $550,000. The median resale home price is $644,500 ($647,000 in September) in North Scottsdale and $277,200 ($283,250 in September) in South Scottsdale. The townhouse/condominium sector in Scottsdale decreased from 190 to 160 sales, while the median sales price decreased from $253,350 to $225,900.

The Mesa resale housing market declined from 555 to 385 sales, while the median price fell from $235,000 to $232,000 ($227,000 in September). The townhouse/condominium sector also fell from 100 to 90 sales, while the median home price decreased from $153,000 to $140,950.

Glendale decreased from 415 to 270 sales and the median sales price decreased from $248,000 to $222,500 ($235,000 in September). The townhouse/condominium sector decreased from 55 to 40 sales, while the median sales price decreased from $141,000 to $140,000.

For the city of Peoria, the resale market declined from 200 to 165 sales, and the median price moved from $257,500 to $248,750 ($251,045 in September). The townhouse/condominium sector decreased from 30 to 15 sales, while the median price went from $162,450 to $189,950.

In comparison to a year ago, the Sun City resale market declined from 80 to 65 sales, while the median sales price decreased to $183,250 from $209,950. Resale activity in Sun City West decreased from at 35 to 30 sales, but the median sales price decreased from $234,450 to $210,000. The townhouse/condominium market in Sun City was stable at 40 recorded sales, while the median home price decreased from $145,000 to $116,000. In Sun City West, activity remained at 10 sales and the median sales price decreased from $160,950 to $152,500.

The resale market in Gilbert decreased from 270 to 230 sales, and the median sales price decreased from $328,000 to $275,000 ($276,000 in September). The townhouse/condominium market remained at 10 sales as the median sales price decreased from $234,900 to $175,000

For the city of Chandler, the resale market fell from 345 to 250 recorded sales, while the median sales price went from $298,000 to $279,000 ($292,200 in September). The townhouse/condominium market declined from 30 to 25 sales and the median sales price declined from $189,900 to $168,000.

The resale market in Tempe decreased from 90 to 85 sales, with the median sales price decreased from $296,500 to $261,200 ($269,000 in September). The townhouse/condominium sector decreased from 50 to 25 sales, while the median sales price increased from $189,950 to $190,000.

The highest median sales price was in Paradise Valley at $1,695,000 with a median square foot house of 3,965 square feet.

In the West Valley, the following communities represent 11 percent of the resale market.

Avondale fell from 140 to 90 sales, with the median price moving from $247,000 to $214,700 ($220,000 in September).

El Mirage decreased from 70 to 50 sales, while the median home price went from $205,000 to $180,245 ($179,900 in September).

Goodyear went from 80 to 85 sales, while the median price decreased from $275,000 to $247,000 ($256,500 in September).

Surprise decreased from 195 sales to 170, with the median price decreasing from $237,000 to $229,080 ($237,450 in September).   

www.theholmgroupaz.com

AZ Republic – Developer gets 2 years to improve hillside subdivision plan

Beth Duckett
The Arizona Republic
Nov. 15, 2007 04:45 PM
 Setting aside concerns over limited access and fire safety, the Maricopa County Planning and Zoning Commission on Thursday voted to give a developer two years to improve its plans for a controversial hillside subdivision near Cave Creek.

The commission voted 6-0 to extend the time on a preliminary plat for Gold Mountain, a proposed 60-home subdivision on the western slopes of Continental Mountain, an unincorporated area northeast of Cave Creek.

Commissioner Mark D. Pugmire was absent.  The decision went against the recommendation of county planners, who wanted the case continued. With only one road in and out of Gold Mountain, planners said they worry about access for emergency vehicles during wildfires or other crisis.

Developer Sienna Corp. has been working on a fire safety program, which impressed Commissioner Jerry Aster.

“I see progress being made,” he said.

Yet uncertainties remain.

“We don’t know what the impact of all this is going to be,” Senior Planner Robert Kuhfuss told the commission. “How much disturbance is it going to have on the hillside?”

The development would need water and wastewater services, Kuhfuss said.

A Sienna representative said the company is considering a contract with Cave Creek’s municipal water company, despite a citizen petition signed by 92 area citizens in opposition.

Nearby resident Anna Marsolo said she thinks a development would spoil the desert’s natural beauty.

Attorney Paul Gilbert, representing Sienna, said plants would be preserved. “That’s what would make the area so (appealing) to homebuyers.” \ www.theholmgroupaz.com  

AZ Republic – Windgate Ranch decking out 6 model homes in holiday decor

Beth Litwin
The Arizona Republic
Nov. 17, 2007 07:19 AM
 SCOTTSDALE – Holiday decorators, busy these days pulling out old boxes of Christmas lights and dusting off the front-door Christmas wreaths, can get some great ideas and maybe a few new decorations this month at the Windgate Ranch community.At the new community, 10190 E. Windgate Ranch Road, near Bell Road and Thompson Peak Parkway, six Toll Brothers model homes will be decked out with holiday themes.

Interior designers have created a theme for each home.  The Solaria’s theme is “Glamorous Gala,” showcasing a cocktail party complete with crystal ornaments, white lights and chiffon ribbons.“The Homecoming” is the theme in the Torre model home, with family heirlooms and keepsakes displayed throughout.

Other themes include the “Silver Star” in the Mercado and “Casa de Elegancia,” featuring a 5-foot Douglas fir wreath, in the Vaquero.

The homes will be open to the public from 10 a.m. to 5:30 p.m. daily through Dec. 16.

Est Est of Scottsdale, Parisi Portfolio of San Diego and Creative Design Consultants of Orange County created the holiday décor.

The holiday decorations will also be put to another good cause during a live auction to benefit the Boys & Girls Clubs of Greater Scottsdale, Gabriel’s Angels and Toys for Tots. Visitors may place bids for the decorations until Dec. 16.  

If you are looking for a home in Windgate Ranch click here:

Or call 480-767-2738


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