Scottsdale Arizona Real Estate Blog

y Jahna Berry – Aug. 27, 2008 12:00 AM
The Arizona Republic

The residents at an upscale downtown Phoenix loft project were booted from the building’s parking lot this weekend, days after some condo owners accused the parking lot’s owner of “wrongdoing” in court papers.

On Friday, signs appeared in the Orpheum Lofts that said “due to an insurance issue” residents could no longer park in the next-door parking lot. On Monday, any remaining cars were towed, residents said.

This week, several residents at 144 W. Adams St. scrambled to find a new home for their cars.

Noah Lewkowitz usually takes a bus to his job at a Tempe architecture firm, but is driving to work this week because he has no place to park.

“It was nice to have my car right below my window where I can see it,” said Lewkowitz who rents a one-bedroom apartment. Residents will have to pay $40 to $80 a month to park in nearby garages, he said.

It’s the latest flashpoint in a long-simmering parking dispute at the Orpheum Lofts, where condo owners have paid anywhere from about $150,000 to nearly $1 million for their homes. Buyers purchased units in the refurbished Art Deco building and parking was included, residents say. The lofts’ developer, however, sold the lot to W Developments.

W plans to build condos on the parking-lot property but has allowed owners to park for free on the lot for a year and a half, said the company’s principal, David Wallach.

When the condos are built, each owner may have to pay more than $30,000 for a space in the high-rise’s parking garage.

The Omega condo project could break ground as early as next year, Wallach said.

In January, owners of 11 condos filed a lawsuit against the lofts’ original developer, TASB, the marketing company and W Developments.

A Maricopa County Superior Court judge dismissed W Developments from the lawsuit.

Last week, the plaintiffs’ filed new court papers accusing W Development of “wrongful conduct related to the acquisition” of the lot.

Those court papers changed things, Wallach said. That’s when he decided not to let residents park there anymore, he said.

“The lawsuit that was pending hadn’t bothered me,” Wallach said, who said he has a “strong relationship” with the Orpheum condo owners.

The allegations then weren’t as severe as they are now, he added.

“Then, as of last week, some people asserted, because they had no other claims, that I somehow did something wrong,” Wallach said.

Since there is no clear legal relationship between Wallach and the loft owners, Wallach said, he could be held responsible if, for example, someone were injured in the parking lot.

“Will those people then assert that my parking lot wasn’t maintained properly, if they are going to accuse me of something else?” Wallach asked. “So at some point you say, that’s not worth the risk, right?”

The parking issue casts a financial shadow over the Orpheum Lofts, one resident said.

“In this economy, there are other people who are upside down on their mortgages already,” said George Reitmeir, a condo owner who is a plaintiff in the court case. “And you want to add $30,000 to $40,000 (for a parking space) on top of that?”

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Michael Clancy – Aug. 26, 2008 10:51 AM
The Arizona Republic

CityNorth will open within three months, and developers are planning a Hollywood-style party.

Grand opening of the development’s first phase – about three linear blocks of shops and restaurants called High Street – is scheduled for Nov. 13.

“The construction team is working very hard to keep things rolling,” said Najla Kayyem, vice president of marketing and public relations for Related, one of the developers. “High Street is being paved and landscaping is going in. The tenants are starting to take possession of their spaces to build out their suites.”

Los Angeles-based Sequoia Productions, producers of the famed Academy Awards Governors Ball for the past 16 years and the Primetime Emmy Awards Creative Arts & Governors Ball for the past eight, will manage the opening.

Events are planned to begin with a block party. The rest of the schedule will be announced within six weeks, Kayyem said.

Construction on track

Construction continues, legal action moves along and CityNorth’s first phase, known as High Street, remains on schedule.

Construction:

• Ten buildings are in place.

• High Street is being paved.

• Landscaping is going in.

• Merchants are beginning to set up shop.

Legal action

• Appeal continues in Turken vs. Gordon, the lawsuit filed by the Goldwater Institute against the city of Phoenix and CityNorth.

• The lawsuit, filed a year ago, challenges the agreement between the city and the developer of CityNorth, under which the city would rebate 50 percent of sales taxes over an 11-year period, totaling $97.4 million, in exchange for the developer building parking garages that will accommodate more than 3,000 vehicles.

Occupation

• Developers say retail and restaurant space is 85 percent spoken for, with 46 shops and eight places to eat along High Street. .

• Upstairs, developers have been cautious about announcements. Najla Kayyem, vice president of marketing and public relations, says the developer is waiting on a report to be finalized on the 99 residential units. On the office said, she added, lease negotiations are under way “with several firms” but that no leases have been executed yet.

Other aspects

• Additional phases of CityNorth are in the works, with the second phase scheduled to open in Fall 2010. That will be 54th Street, heading south from High Street, and The Boulevard, paralleling High Street. Three anchor department store tenants, Nordstrom, Bloomingdale’s and Macy’s, will open during that phase.

• The development is being built to LEED standards, a certification from the U.S. Green Building Council. Those include several sustainable features, from light-pollution reduction to an internal recycling program.

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by William Hermann – Aug. 21, 2008 10:40 AM
The Arizona Republic

The silver towers of the SunCor Hayden Ferry Lakeside mixed-use development on Tempe Town Lake just east of Mill Avenue soon will include a high-end high-rise hotel, SunCor Development Co. vice president Randy Levin said.

But it won’t be the luxury Le Meridien hotel that Starwood Hotels and Resorts Worldwide Inc. had been promising until recently.

Levin said he is not yet prepared to say what hotelier will now put up the building

“There will soon be a big announcement, and the hotel is going to be spectacular,” he said.

Since the beginning of SunCor’s lakeside development, a hotel was in the picture. But in recent months, some wondered whether there would be any hotel at all after Starwood backed out. Adding hotel space in the downtown Tempe area has been a priority for both city planners and developers in recent years. Now the $100 million-plus hotel will be put up by a company being lined-up by SunCor development partner Tod Decker, president of Scottsdale-based Valhalla Development Group. He said plans for a hotel to replace Le Meridien are going forward “full throttle.”

“It will be a four star, four diamond hotel, a beautiful hotel, and we have the land and will break ground in December,” Decker said. “It’s going to happen.”

Levin called the project “an A-plus site in an A-plus location with an A-plus flag company to put it up.”

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by Andrew Johnson and Catherine Reagor – Aug. 21, 2008 12:00 AM
The Arizona Republic

Two high-profile Valley developments that stalled amidst the bankruptcy of Arizona’s biggest private lender are closer to getting the money they need to move forward.

Developers of both the Centerpoint high-rise project in downtown Tempe and the Main Street Glendale project have struck financing deals with Mortgages Ltd., which was forced into bankruptcy in June.

The two projects, along with other large developments across the Valley, are embroiled in Mortgages Ltd.’s bankruptcy and have been unable to secure financing from other lenders. Mortgages Ltd. and its investors have claims on the developers’ properties as collateral for the loans.

Mortgages Ltd. agreed to initially line up $4.6 million from other sources for Centerpoint developer Avenue Communities so it can protect the two high-rises from the weather. The deal calls for Mortgages Ltd. to funnel an additional $75 million to the developer later so the condominium towers can be completed.

Separately, Rightpath Ltd. Development Group, which plans to build the 500-acre, mixed-used Main Street Glendale project, said it intends to drop its lawsuit against Mortgages Ltd. Rightpath sued the lender in May, saying that it did not get all the money it was promised and that Mortgages Ltd. charged it excessive fees. The two groups have agreed on new loan terms, which include Mortgages Ltd.’s finding Rightpath as much as $85 million more in financing.

Both deals are subject to Bankruptcy Court approval. Mortgages Ltd. investors, who maintain they own portions of the Centerpoint and Main Street loans, will also likely have a say in any additional financing for these developments. One glitch could be that the lender’s investors don’t want another financer to get a bigger stake in the projects’ collateral. Investors’ dividend checks have been on hold since June, and if another lender becomes involved in the loans, investors’ stakes could shrink even more.

Ken Losch, a principal with Centerpoint’s developer, said he believes the new deal with Mortgages Ltd. will be better for the investors than if he sues the lender over construction delays and seeks more damages. The deal between Centerpoint and Mortgages Ltd. includes some money to compensate the developer for delays, Losch said.

The first Centerpoint tower was scheduled to open in October. The 22-story building and its 171 condos are almost finished. But Losch estimates it will be 90 days after he gets all the additional financing before the first high-rise opens. That means the first tower will not open before November.

The second tower has 30 stories, 186 condos and is 80 percent done.

A Mortgages Ltd. bankruptcy hearing for the Centerpoint developer to get $2.8 million in emergency financing is scheduled for Monday. Plans for the developer to get the rest of the $4.6 million have not been disclosed.

Rightpath has not broken ground on its Glendale project, which is tied to the city’s minor-league baseball stadium that will be home to the Chicago White Sox and Los Angeles Dodgers during spring training.

As part of Rightpath’s new deal with Mortgages Ltd., the developer has also dropped a motion in Bankruptcy Court to force the lender to liquidate its assets.

No bankruptcy hearing has been set for Rightpath’s new financing.

But the new deal between the Glendale developer and the lender will likely be discussed at a hearing today, as will interim emergency financing for Mortgages Ltd. to keep operating.

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by Jahna Berry – Aug. 20, 2008 11:08 AM
The Arizona Republic

Thousands of Arizona State University students began moving today into residence halls on the school’s four campuses.

The university, which has 64,400 students, has space for more than 11,000 students in on-campus housing. The Tempe campus offers room for about 9,000 students, the West campus has apartment-style housing for 400 students, the Polytechnic campus can house up to 1,100.

And today the downtown Phoenix campus officially unveiled Taylor Place, a new 13-story dorm with 576 beds.

Freshman Rudy Rivas, 17 was excited that he would be one of the first students to sleep in a dorm that the university officials have called state of the art.

“I definitely wanted to live in Taylor Place because it was brand new,” said Rivas, a San Diego native who also considered the University of Southern California before settling on ASU.

“A lot of other dorms at other schools were old, and you had to share a bathroom with three or four people — or the whole floor.”

At Taylor Place, Rivas will only have to share a bathroom with his roommate.

The $150 million residence hall features digital display bulletin boards and uses green technology. Air conditioning condensation for example, is used for irrigation, said Mark Kranz, design principal at SmithGroup, the firm that designed the building.

When it’s time for residents to do laundry, students will get a text message when their load is done, university officials say.

Classes begin on Aug. 25.

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Peter Corbett – Aug. 19, 2008 07:44 PM
The Arizona Republic

Arizona’s real-estate industry has slowed to a crawl, but four northeast Valley developers are pursuing a segment of buyers with money and at least a few more years to enjoy it.

Four luxury-retirement communities with nearly 1,200 units are in the pipeline in Scottsdale and nearby Desert Ridge, with development costs of more than $500 million.

Developers say they are not worried about overbuilding these communities, which will cater primarily to seniors living independently.

“We are aware (of the competition) and believe there is enough room for all of us,” said Jason Craik, vice president of Avenir Retirement Communities, based in Vancouver, British Columbia.

Arizona is among seven states with the most robust construction activity for senior housing. The other states are Washington, California, Colorado, Texas, Illinois and Ohio.

Each of the states has more than 2,000 units under construction, said a recent report from Marcus & Millichap Real Estate Investment Services.

Wealthy senior buyers in northeast Phoenix and Scottsdale will have a choice of four new communities:
• Arté, 170 units on nearly 5 acres at 114th Street and Via Linda.
•  Maravilla Scottsdale, 410 units on 25 acres northeast of Scottsdale Road and Frank Lloyd Wright Boulevard.
•  Classic Residence at Silverstone, 270 units on 32 acres southeast of Scottsdale and Pinnacle Peak roads.
• Sagewood, 342 units on 85 acres at Mayo and Tatum boulevards.

All four feature contemporary interior designs that match the Valley’s upscale condominiums and dispel outdated perceptions of what retirement housing looks like.

“This business has evolved,” said Craik, whose company is building Arté. “These people are not just waiting to pass on.”

All four communities are going after so-called go-go seniors, who play golf, tennis, hike and exercise regularly. Each also has a limited number of accommodations for “slow-go seniors” in assisted-living units.

Maravilla, Silverstone and Sagewood will also offer care for residents with Alzheimer’s disease or dementia. Silverstone will have 24 beds in a nursing center and Sagewood will have 32 beds.

Amenities will include swimming pools, fitness centers and multiple dining options. Maravilla and Silverstone will include pitch-and-putt golf courses.

Silverstone’s development partners, the Peoria-based Plaza Cos. and Chicago-based Classic Residence by Hyatt, are pouring more than $195 million into their project.

Silverstone is under construction on the site of the former Rawhide theme park.

Jackie Wolf, Classic Residence by Hyatt sales director, said the company’s success with its luxury-retirement community at Grayhawk led to development of Silverstone.

Buyers have put down deposits on about 75 percent of the Silverstone units, she said, adding that the average age of buyers is 77.

“But as I tell our future residents, 80 is the new 60,” Wolf said.

Tim Cowen, Maravilla executive director, said a lot of buyers in their mid-60s are planning ahead, knowing that they can move from independent-living villas into assisted-living units if and when they need to.

“This is about making their own decisions,” he said.

Maravilla is being developed west of the Fairmont Scottsdale Resort by the San Diego-based Senior Resource Group. The 20-year-old company has 13 retirement communities, including four in Arizona, in Phoenix, Tucson, Chandler and Green Valley.

The Avenir Group developing Arté has five retirement communities in British Columbia and is planning one more there, plus one each in Surprise and Chandler.

Mark Myers, a senior vice president for Marcus & Millichap, said Arizona is still a strong market for retirement centers, but sales of luxury-retirement units in Scottsdale will depend greatly on the recovery of the single-family housing market nationally.

“Some of the go-go seniors are having trouble because they have trapped equity in their homes,” he said.

Nationally, occupancy in independent-living senior housing was 95 percent last year and the average rent was $2,390 per month, according to the Marcus & Millichap report.