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April 20, 2019
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Crown Realty & Development to Move Forward with 96-Acre Master-Planned Community in North Phoenix

2/04/19

Crown Realty & Development has purchased 96.5 acres and acquired the “Master Developer” rights in North Phoenix’s Desert Ridge master planned community. The property and rights have been the subject of active litigation and bankruptcy for a decade. Crown now plans to develop the land as a new urban core in Phoenix.

Crown’s winning bid for the land was $54 mil, while the Bankruptcy Court had previously valued the land as high as $121 mil.

The acquired acreage comprises the majority of the vacant land east of the 1.2 msf Desert Ridge Market Place and that surrounds the existing High Street. The land Crown has acquired is zoned for about 2500 residential units, 2 msf of office, 500 hotel rooms and 100k sf of retail.

“Unlocking this parcel from years of litigation now provides the opportunity to develop a 21st century urban community on the north side of Phoenix,” said Robert Flaxman, CEO of Crown. “What Century City was to Los Angeles in the 1960s, the new City North project will be to Phoenix,” he said.

Flaxman said there is now finality about litigation and certainty about future development on what many consider to be Phoenix Metro’s most prized, undeveloped commercial property. As part of bankruptcy court proceedings, all claims have been settled. As part of the judgment, Crown obtained what are known as “master developer” rights not only for its 100-acre site, but also the entire 5,700 acres at Desert Ridge from the 51 Fwy to 64th St and on both sides of the heavily trafficked Loop 101. That’s approximately five square miles in the City of Phoenix’s highest-growth corridor.

City North was planned in the mid-2000s to be a significant retail development that was to include Bloomingdales, Nordstrom’s and Macy’s. The recession and years of litigation prevented the project from moving beyond the High Street portion that was completed in 2008.

“It’s impossible to grow new land but the slumbering status of this property for the last decade or more does exactly that, as the end of litigation means the start of development for what is unquestionably one of the best pieces of real estate in Arizona, and perhaps America,” said Rick Carpinelli, Senior Vice President of Acquisition and Development at Crown.

The greater Phoenix market is maturing with corporate headquarters for technology, health care and financial service companies moving to and expanding in the market. The majority of that growth has been centered in Tempe or the Southeast Valley, where land and zoning has been plentiful to meet the demand. That’s likely to change, as businesses will soon be able to pursue opportunities at Desert Ridge.

Prior to the Great Recession and the more recent legal imbroglio, significant commercial development did occur at Desert Ridge in the late 1990s and early 2000s with Desert Ridge Marketplace, Mayo Clinic, JW Marriott Resort, American Express and thousands of residences.

Mayo Clinic has recently announced plans to double the size of its nearby 250-acre campus with a $650 mil investment. Arizona State University has broken ground on its first 166k sf building on its adjacent healthcare campus. American Express is also under construction on a new 300k sf building, expanding its current employee base of 5,000 to 8,000.

“The new City North project will include a residential core, office buildings from four to ten stories, vibrant new restaurants, a full-service hotel and several select service hotels,” said Rick Carpinelli, Senior Vice President of Acquisition and Development at Crown.

Crown is already working with several major corporate users looking to locate their business at Desert Ridge. Crown will begin developing the property this spring and plans to complete the streets, sidewalks and landscaping by the end of 2019. In addition, Crown anticipates the first office building, the first residential project and the first restaurant all starting construction this year.





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