Mortgage And Real Estate News

Sunday, July 8, 2012

Why it's time to break up the 'too big to fail' banks - The Term Sheet: Fortune's deals blog Term Sheet

FORTUNE -- America is downsizing. Whether it's the food we eat, the cars we drive, or the houses we live in, Americans are concluding that smaller is better. Even U.S. corporations are starting to see the benefit of more Lilliputian institutions; the impending -- and widely hailed -- breakups of McGraw-Hill (MHP) and Kraft (KFT) are two examples.

So what about banks? It would surely be in the government's interest to downsize megabanks. Sen. Sherrod Brown (D-Ohio) continues to push his bill to split apart the largest institutions. Regulators have new authority to order divestitures under the Dodd-Frank financial reform law. From a shareholder standpoint, government breakups have a pretty good outcome. It worked out well for John D. Rockefeller, whose shares in Standard Oil doubled after it was ordered to break up. Ditto for those who owned stock in AT&T (T).

Yet with gridlock in Washington, don't count on politicians for a solution.

Shareholders, however, have an interest in demanding that big banks split apart.

Comparing the valuation for the supersize banks (Citigroup (C), Bank of America (BAC), and J.P. Morgan Chase (JPM)) with their simpler, leaner competitors isn't pretty. Price/earnings per share for the supersizers averages 5.8, compared with 8.1 for smaller, more focused Wells Fargo (WFC) and 8.1 for the bigger regional banks like U.S. Bancorp (USB) and PNC (PNC). More telling is the ratio of share price to tangible book value. For the supersizers, the average is 72% of book, compared with 165% for Wells and 142% for the big regionals. Chase's strong performance holds up the average for the supersizers, but even its price to book is only 110%. Wells' superior performance suggests that complexity is a bigger drag on returns than size is. Even though Wells' assets exceed $1 trillion, it has pretty much stuck to its basic business of taking deposits and making loans, and in the process has consistently delivered solid returns.

10 best stocks for 2012

Before the financial crisis, the supersizers benefited from high levels of leverage and cheap debt funding costs from their "too big to fail" status. All that has changed. Capital requirements are going up significantly for mega-institutions. The cost of borrowing will rise, too, as bondholders come to realize that Dodd-Frank means what it says: no more bailouts. New rules on liquidity, proprietary trading, and derivatives will also eat into earnings. So it is hard to see how the megabanks' numbers can improve.

Supersizers argue that their scale is necessary to meet the financial needs of multinational corporations. But it's not clear that multinationals find it advantageous to do business with a handful of financial titans. Dealing with smaller, more focused institutions provides specialized expertise and less risk of conflicts. If there were really that much value in supersizer services, presumably it would show up in shareholder returns. But it doesn't.

Supersizers also argue that their economies of scale can lower costs for customers. Studies show that some economies of scale do exist, but they are limited by management difficulties in overseeing many different business lines. So while average overhead costs go down, average revenues go down even more. This effect can be mitigated by strong management, as Chase's exceptional performance demonstrates. But how many Jamie Dimons are out there?

At the beginning of the year, Citi's share price was trading at 58% of tangible book value, while BofA was trading at 48%. If Citi and BofA were broken up into smaller institutions that traded at price to tangible book ratios on par with the average of the big regionals, their shareholders would see $270 billion in appreciation. JPM shareholders would see $52 billion in appreciation.

So, shareholders, get ye to the boards that represent you and ask them loudly about whether your company would be worth more in easier-to-understand pieces. The public-policy benefits of smaller, simpler banks are clear. It may be in the enlightened self-interest of shareholders as well.

by Sheila Bair Jan 18, 2012

Why it's time to break up the 'too big to fail' banks - The Term Sheet: Fortune's deals blog Term Sheet

Gilbert weighs apartments

At least four developers are looking to build hundreds of apartments in Gilbert, forcing town leaders to weigh the benefits and challenges associated with adding more multifamily housing .

A recent proposal from the New York-based Rockefeller Group for a 402-unit apartment complex near Recker and Warner roads is the latest of four projects submitted to town officials during the last year.

Two major complexes have been approved and are moving forward with construction, with two others still working through zoning changes and design approval.

The four complexes would bring a combined 1,312 new apartments to Gilbert, increasing the town's existing multifamily inventory by 18 percent. The apartments could increase Gilbert's population by about 3,000 to 4,000 people.

Medium and high-density residential projects have often been met with opposition from civic leaders and town residents, who decry a perceived negative impact on land values an expected increases in traffic and crime.

Mayor John Lewis, however, said there is a need for multifamily housing in Gilbert, and land has been set aside in the town's General Plan for apartments and condos.

But high-density housing is not a priority, and the Town Council is unlikely to support proposals that replace valuable commercial space with apartments, Lewis said.

Recent proposals for new complexes include the following:

Gateway North Apartments, near the northeastern corner of Recker and Warner roads.

Val Vista and Pecos apartments, on the northwestern corner of Val Vista Drive and Pecos Road.

Highland Groves Luxury Apartments, on the northeastern corner of Elliot Road and Beebe Street.

SanTan Village Apartments, next to the DoubleTree hotel and near SanTan Village mall.

by Parker Leavitt - Jul. 6, 2012 12:26 PM The Republic |

Gilbert weighs apartments

Decrease in foreclosures increases bidding wars

Bidding wars among investors and regular homebuyers continue to escalate because of the lack of supply.

Residential foreclosures in metro Phoenix fell again last month.

That's good news for some struggling homeowners, but it means fewer bargain-priced homes on the market for potential buyers.

In June, lenders took back 1,719 homes, according to AZ Bidder. That's about 300 fewer than in May.

Demand for commercial properties is also heating up as banks move to take back fewer office, industrial and retail properties in the region and small-business owners compete with investors for the shrinking supply of foreclosure buildings for sale.

"It is competitive out there now to buy commercial properties," said Beth Jo Zeitzer, president of Phoenix-based R.O.I. Properties.

Only about 120 of the foreclosures in metro Phoenix last month came on commercial properties.

Now, the majority of commercial-real-estate buyers in the Phoenix area are individuals and owner-occupants trying to buy their own facility before prices climb too high again.

Unlike with residential foreclosures, Zeitzer said, many individuals and small-business owners are able to compete with investors on commercial foreclosure deals.

But Zeitzer said that as in the residential market, commercial foreclosures have already peaked and will likely continue to decline.

Freescale site makeover

Phoenix's Wentworth Property Co. was launched in 2005 during the real-estate boom.

But the commercial-real-estate firm, led by veteran real-estate broker and developer Jim Wentworth and his son Jim Jr., took on its biggest project during the downturn.

Last summer, Wentworth and partner Northwood Investors paid $53.7 million for a 136-acre commercial project in Tempe at Elliot Road and Loop 101.

Freescale Semiconductor sold the office park and is leasing back three of its buildings. Another three are vacant and ready to lease.

The Wentworth group renamed the project at the former Motorola campus -- which had become home to Freescale -- Discovery Business Park. The real-estate firm spent another $13 million renovating the business park's buildings, parking and landscaping.

"Discovery Business Park will end up being more than a $200 million deal that will take us through the next cycle," Jim Wentworth Jr. said.

Discovery Business Park is zoned for another 1.6 million square feet of office, retail and hotel space.

by Catherine Reagor - Jul. 6, 2012 03:01 PM The Republic |

Decrease in foreclosures increases bidding wars

370 units for Desert Ridge

One-half of a Desert Ridge parcel approved for 722 apartments was sold last week.

Greystar Real Estate Partners of Charleston, S.C., paid $10.5 million for 13 acres in northeast Phoenix. The site is on the northern portion of the parcel at the northeast corner of 56th Street and Deer Valley Drive.

The seller was Westfield Capital Partners, which, according to broker Michael Lieb, recently bought out its partner, Greystone Property Development.

Westfield/Greystone bought the entire 26-acre parcel in 2007 for $28.5 million.

Greystar hopes to build 370 apartments on its 13-acre site. Rents are expected to range from $850 to $1,600 for the units, which will be 575-1,100 square feet.

Construction is expected to begin by the second quarter of 2013. Development costs, including land and buildings, are estimated at $50 million to $60 million.

The project will be called Elan Desert Ridge.

Last year, the project was divided into two phases to aid in financing.

The land already has been rezoned for multifamily housing, a category that covers apartments and condominiums.

Westfield is holding on to the southern half, where about 350 units are allowed.

The Elan development could be the first housing in Desert Ridge east of 56th Street and north of Loop 101.

The Arizona State Land Department had sold most of the land by 2008, but the effects of the recession led most of the buyers to return the land to the department.

Desert Ridge is a master-planned development that includes 5,700 acres. Its southern boundary is Reach 11 and the Central Arizona Project canal. On the north, it is bounded by Pinnacle Peak Road, and on the east by 64th Street. The west boundary is irregular, going as far east as 32nd Street.

by Michael Clancy - Jul. 6, 2012 12:26 PM The Republic |

370 units for Desert Ridge

Condos cause Windgate stir

Some residents of Windgate Ranch are trying to block development of a two-story condominium project they say would disrupt their neighborhood and block their McDowell Mountain views.

Deco Communities wants to build 104 condos on a nearly 11-acre site that wraps around the Windgate Crossing shopping center northwest of Bell Road and Thompson Peak Parkway.

Neighbors west of the site filed a legal protest last week over the requested rezoning from commercial-office uses to multifamily residential. If the protest meets city rules, the project would require approval by six of seven Scottsdale City Council members.

"We thought it would be lower-density insurance or doctors offices" that would operate weekdays during business hours, said Brian Cook, a Windgate resident since 2007.

The council was scheduled to consider the project this week, but the developer asked that a decision be postponed until Sept. 4.

Zoning attorney John Berry said the rezoning for the "$15 million shovel-ready project" has been politicized by the Aug. 28 city election. "This is a downzoning," he said of the proposed switch from commercial to residential use.

Under the existing commercial zoning, a 36-foot office building of 317,465 square feet could be built. At that size, 1,058 parking spaces are required. Workers and visitors would generate an estimated 1,690 daily vehicle trips to and from the offices.

The proposed residential zoning would allow a 36-foot building totaling 168,878 square feet. It would have 192 parking spaces, including 104 in garages.

Both the offices and condos would be as close as 50 feet from the Windgate Ranch properties.

"These buildings are going to be right on top of our homes," resident Steve DeBiase said of the condos with second-story balconies. "(We're) trying to protect our investments."

by Peter Corbett - Jul. 6, 2012 12:27 PM The Republic |

Condos cause Windgate stir

Habitat for Humanity Central Arizona is renovating old homes

Think Habitat for Humanity, and the vision that likely comes to mind is former President Jimmy Carter building a house on a vacant lot from the ground up.

Since the organization was founded in 1976, the bulk of work done by its staff and legion of volunteers has been building more than 200,000 homes throughout the world.

That model is changing for some of the organization's affiliate chapters, among them Habitat for Humanity Central Arizona.

In places like the Valley, the organization finds that it often makes more sense to renovate existing homes than build new ones. Renovations reduce the stock of empty houses in neighborhoods and, in many cases, allow recipients to remain in the community.

Recently, Habitat has gotten into the home-repair and renovation business, contracting with Chandler and Glendale to be the non-profit organization administering emergency home-repair programs. Soon, the organization plans to launch a stand-alone home-repair business that could generate the bulk of its work.

"We'll do that in the next month or so," said Roger Schwierjohn, Habitat for Humanity Central Arizona president. "In the future, we see 60 percent of our effort helping homeowners who are low-income and hardworking with their home repairs. We think that's how much growth we have in the home-repair business.

But that doesn't mean the group will move away from its original mission of building homes.

"We're not looking to reduce our volume of new homes," Schwierjohn said. "As a matter of fact, our production has continued to increase, and we don't see that changing. But we do see even more opportunities with the home-repair business."

Habitat's home-repair business will work similarly to its new-housing model. It will be available to low-income homeowners who could not otherwise afford to have the work done. Those who participate will take out a no-interest loan with Habitat to pay for the repairs.

"We're a hand up, not a handout," Schwierjohn said. "We know a lot of people who own homes in the areas we service maybe can't maintain their home as well as they should because they can't afford to or don't qualify for conventional financing."

Schwierjohn said the shift toward renovating and repairing homes began in 2008 with the economic downturn. Anticipating reduced donations due to the recession, the organization looked to diversify its revenue streams with actions like expanding its ReStore operations, retail outlets where Habitat sells donated building supplies.

It also looked for new ways to help the communities it served with the growing number of empty homes in Valley neighborhoods.

"Back then, we only built new (homes), but there was an abundance of vacant and foreclosed homes sitting idle in neighborhoods," Schwierjohn said. "Those vacant homes became targets for criminal activity. Many of them were used to conduct drug trades and were vandalized. We saw what the impact was to those neighborhoods."

That led to the idea of renovating vacant homes instead of building.

Last year the organization responded to a Glendale request for proposals for a non-profit organization to administer the city's emergency home-repair program.

Since August of last year, Habitat employees or subcontractors have completed nearly 150 home repairs for Glendale residents, addressing problems such as plumbing leaks, broken air-conditioning units or electrical issues.

"So far, they've done an incredibly good job," said Charyn Eirich-Palmisano, Glendale revitalization supervisor. "The transition from our old vendor to Habitat has been very good. We're quite happy with their performance and the citizens seem to be quite happy with their service."

Chandler officials took notice of the organization's success in Glendale and took that into consideration when Habitat responded to a similar request for bids in Chandler.

Habitat began administering Chandler's emergency-repair program on June 9 and is being considered for the more extensive housing-reconstruction program the city operates.

Schwierjohn said the experience gained in administering the city programs, although not profitable, will prepare Habitat to run its stand-alone repair business. If it becomes successful, it will allow the organization to continue its mission of providing safe, decent, affordable housing to the people it serves.

"We're excited," Schwierjohn said. "We know that the economy still has its challenges. We know we have to continue to struggle to work hard, to claw, to be creative, to do whatever it takes to continue to serve the community.

by Weldon B. Johnson - Jul. 4, 2012 10:05 PM The Republic |

Habitat for Humanity Central Arizona is renovating old homes

Gilbert farmer in controversial 2009 land deal sued

The Gilbert dairy farmer who made millions of dollars in 2009 from a controversial land deal with the town has been sued by a Valley real-estate company that claims it had exclusive listing rights to part of the property.

Scottsdale-based Commerce Realty Advisors is seeking damages worth $468,570 plus interest for a commission on the 60-acre parcel farmer Bernard Zinke sold Gilbert for $300,000 an acre.

The deal was part of a complex transaction that helped Gilbert secure land for future parks and road improvements but cost taxpayers $50.2 million. The deal generated a controversy in September 2010 when The Arizona Republic disclosed that town officials failed to secure an appraisal during negotiations, and that land experts said the "head-scratching" purchase price was out of tune with market prices in the area.

In a civil complaint filed in March, Commerce Realty Advisors claims Zinke signed a five-year exclusive listing agreement in November 2003 entitling the company to 2.5 percent of the gross proceeds from the sale.

Although the listing agreement expired in November 2008 and the land deal didn't close until March 2009, the complaint alleges negotiations between Zinke and town officials began in early 2008 and that the parties reached an initial agreement by midyear. Town officials verify that account, but Zinke denies it, according to court records.

Commercial Realty Advisors claims its commission was due at closing and subject to 18 percent interest per year if left unpaid, according to legal filings. For each day the commission goes unpaid, the interest accrues by about $231, the company claims, possibly totaling about $281,000.

In a response filed in April, however, Zinke denies negotiating a deal with town officials in 2008 and denies owing a commission to Commerce Realty Advisors. Zinke's attorney, Richard Nye, contends that a prior breach of contract had voided the agreement, and he is asking the court to toss the lawsuit and award attorney's fees to his client.

The Arizona Corporation Commission lists commerce broker Philip DeAngelis as president and CEO of Commerce Realty Advisors; Michael Martindale is listed on the company's website as the designated broker.

Phoenix attorney Jennifer Stevens, representing Commerce Realty Advisors, said her client has no comment beyond the information included in court filings.

Nye did not respond to a request for comment.

While land experts expressed surprise at the Zinke land deal's $300,000-per-acre price tag, the lawsuit suggests Gilbert bought the property for more than it had been previously listed by the company.

The deal included 62.5 undeveloped acres on the southwestern corner of Greenfield and Germann roads, where the town envisions a special-events center, and 80 acres on the southwestern corner of Greenfield and Chandler Heights roads, slated for a park. The town lacks the funding to complete either project.

Former Gilbert Town Manager George Pettit led negotiations for the property in 2008 after he was directed by the council to secure parkland in the town's underserved southern region.

Comparable sales and existing appraisals on much of the land suggested a per-acre value of around $67,000. Following The Republic report, Gilbert officials revised the town's land-acquisition policies to include mandatory appraisals for all purchases.

The council referred the Zinke deal to state Attorney General Tom Horne's office for an independent investigation. Nearly a year later, Horne's office announced it found no evidence of criminal activity and closed the case.

The deal was a key theme in last year's town council elections. The four incumbents who had voted for it all lost.

Gilbert used $10 million in voter-approved bond money and about $32 million in public-facilities bonds to buy the land.

by Parker Leavitt - Jul. 4, 2012 10:12 PM The Republic |

Gilbert farmer in controversial 2009 land deal sued

Another northeast Phoenix infill project planned

Cachet Homes is planning a second infill development in northeast Phoenix if rezoning to allow for 100 homes on the parcel is approved.

The developer has its eye on property now used for boarding horses at 44th Street and Grovers Avenue, north of Bell Road.

It would be Cachet's second new development in northeast Phoenix. The company also is involved with a 200-unit apartment project on Cactus Road west of Paradise Valley Mall.

Matt Cody, president and owner of Cachet, said the horse property consists of 20 acres south of Foothills Elementary School. It is the home of Santa Rita Stables.

The property's assessed value is about $2 million.

A representative of the property owner, Santa Rita Stables Holding Co. LLC, could not be reached. The property apparently never has been developed beyond its current use.

Escrow opened in May and is contingent on the rezoning. A first hearing before the Paradise Valley Village Planning Committee will take place at 6 p.m. Monday at the Paradise Valley Community Center, 17402 N. 40th St. The request is scheduled to reach the City Council at its Sept. 19 meeting.

Rezoning of the 5-acre parcel for the apartment project on Cactus Road was approved earlier this year, and developers are waiting for leases in the current building, the 33-year-old Paradise Valley Medical Center, to expire, Cody said.

Cachet will team with Joe Meyer of Southwest Next Capital Management to construct the apartments, which will provide an upper-end housing alternative near the mall.

The property will include two four-story buildings that will wrap around a central courtyard with a pool. Parking will surround the buildings.

Both projects should be under way early next year, barring any unforeseen circumstances, Cody said.

by Michael Clancy - Jul. 6, 2012 04:15 PM The Republic |

Another northeast Phoenix infill project planned

Assembly OKs adding bank settlement into Calif law

SACRAMENTO - California will become the first state to write into law much of the national mortgage settlement negotiated this year with the nation's top five banks, and expand it to all mortgages, under wide-ranging legislation approved by state lawmakers on Monday.

Majority Democrats sent the homeowner protection package to Gov. Jerry Brown despite opposition from business and lending organizations and most Republican legislators.

The Assembly approved the legislation on a 53-25 vote, and the Senate followed quickly on a 25-13 vote.

The legislation would require large lenders to provide a single point of contact for homeowners who want to discuss loan modifications. It would prohibit lenders from foreclosing while the lenders consider homeowners' request for alternatives to foreclosure. And it would let California homeowners sue lenders to stop foreclosures or seek monetary damages if the lender violates state law.

The protections would benefit all California homeowners, not just those whose mortgages are with the five banks that signed the national settlement in February. And many of the restrictions would become permanent, while those in the nationwide agreement will end after five years.

It applies to all owner-occupied residences, but not commercial or rental properties

Jose Vega drove 70 miles to Sacramento with his two young children to lobby lawmakers to pass the legislation after he spent three years battling to keep his home in the San Francisco-area city of Pittsburg.

In November 2009, he said he found a trustee sale notice posted on his door 16 days after he was placed in a loan modification program. He was put into another modification program in the spring of 2010, only to have the bank again begin foreclosure proceedings.

Vega, 52, eventually kept his home after filing for bankruptcy and getting help from the office of Democratic U.S. Sen. Dianne Feinstein. Now he and his family owe $466,000 -- including the bank's legal fees -- on a home he said is worth about $200,000.

"I'm not asking for a handout. All I'm saying is, you created this mess, let's work something out," said Vega a member of the Alliance of Californians for Community Empowerment. "Hopefully, California will lead the way so other states will follow."

Attorney General Kamala Harris said the compromise legislation negotiated with lawmakers "is going to bring transparency and fairness to California homeowners in a way they've never had before."

She helped negotiate the February settlement that requires Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. to pay $18 billion in penalties to California homeowners.

Key portions of her original proposal to write the settlement into state law were stalled by opposition from some of her fellow Democrats in the Legislature, until the right to sue banks and other measures were significantly narrowed.

"This legislation can be the catalyst not only for a recovery of California's real estate market, but a catalyst across the nation as borrowers everywhere will demand the same protections given to California borrowers, the same protections given to our families," said Assemblyman Mike Feuer, D-Los Angeles, a member of the conference committee that negotiated the bill. "And those protections boil down to this: They ought to be treated fairly, they ought to be treated consistently."

Lenders' organizations joined by the California Chamber of Commerce said in a letter to lawmakers on Friday that the final legislation is an improvement, though they still fear it will "encourage frivolous litigation" by borrowers who cannot realistically afford to stay in their homes.

The lending industry cited a study it commissioned by Beacon Economics, a Los Angeles-based research firm. It echoes industry arguments that letting homeowners sue their lenders, even in limited circumstances, will delay foreclosures and increase lenders' costs, potentially harming the shaky housing recovery and making it more difficult and costly to obtain mortgages.

The legislation can't address what lenders say is the underlying problem: too many borrowers can't afford their payments.

"It's a mistake that will hurt this economy for years to come," said Sen. Sam Blakeslee, R-San Luis Obispo, a member of the conference committee.

Supporters of the bill say it still takes important steps.

"The point is ... not to launch an avalanche of lawsuits. What it's really about is having some meaningful accountability to ensure that servicers follow the rules," said Paul Leonard, director of the California office of the Center for Responsible Lending, a consumer group.

Previous efforts have repeatedly failed to clear the Legislature. Leonard said the national mortgage settlement and Harris' involvement are likely to make the difference this year.

Sen. Noreen Evans, D-Santa Rosa, who co-chaired the conference committee that negotiated the bill, said Brown's administration worked with Democrats on the legislation and has given every indication he would sign it into law. However, Brown declined to comment as he left the office of Senate President Pro Tem Darrell Steinberg, D-Sacramento, moments before the vote.

The law would not take effect until Jan. 1, though Evans and Harris said they expect lenders would begin following the new rules immediately even if the penalties don't yet apply.

by Don Thompson - Jul. 2, 2012 04:44 PM Associated Press

Assembly OKs adding bank settlement into Calif law

Monday, July 2, 2012

Housing-market crash takes toll Arizona real-estate agents

The recession took a toll on Arizonans employed in real estate during the past five years with the loss of nearly 17,000 agents.

There are 35,864 real-estate agents with active licenses, down 32 percent from 2007 when there were 52,286 active agents, according to recent figures from the Arizona Department of Real Estate.

The number of license holders is down 4 percent from last year.

An additional 19,245 agents have inactive licenses, meaning they are not employed by a broker and cannot conduct any real-estate activity. That is up from 12,652 agents with inactive licenses in 2007.

"You saw during those years that Realtors had to weigh the economics to decide about staying in the business as a primary income generator," said Rebecca Grossman, president and CEO of the Scottsdale Area Association of Realtors. "When the market is like that, if you're not truly committed it's difficult to make a living."

The association saw its membership fall 11 percent in 2009 from the previous year. It bottomed out in 2011 at 7,068 members but has increased 2 percent this year to 7,200 members.

Meanwhile, there has been a gradual recovery in the housing market, Grossman said.

The Standard & Poor's/Case-Shiller home-price index released Tuesday revealed increases in 19 of the 20 U.S. cities tracked from March to April.

San Francisco, Washington, D.C., and Phoenix posted the largest increases. Prices were up 2.5 percent in Phoenix, 2.8 percent in Washington and 3.4 percent in San Francisco.

Good agents forced out

Gordon Snyder, chairman of the Realtors group, said a lot of good agents were forced out of the business during the downturn.

"They had to make money and couldn't hang on," he said.

Now that the market has turned, Snyder said, he and other agents, brokers and title companies are seeing a tremendous amount of activity.

"I've had more deals in escrow at one time than ever before," said Snyder, with Realty Executives.

The flip side is that the deals are about half the value of what they were at the market peak, he said.

The Northeast Valley's luxury market is starting to recover with fewer "screaming deals" in Paradise Valley and Scottsdale, Snyder said.

Brokers holding steady

The number of brokers and real-estate companies has been more stable during the recession.

ADRE reports that there are 12,618 brokers statewide, down 3 percent from last year but up 1.6 percent from 2007. The number of brokers peaked at 13,120 in 2010.

There are 2,868 self-employed brokers. Active real-estate companies total 8,385 as of June 1, down 3.4 percent from last year and 3.1 percent from 2007.

Real-estate agents pay $110 for a license and $100 for a renewal.

Agents must work under the supervision of a broker. Brokers pay $225 for an original license and $250 for a renewal.

Gary Holloway of Zip Realty Inc. said it's too early in the housing-market recovery for a lot of agents to get into the business.

"It's going to start picking up," he said. "We'll start to see more agents as we get more inventory."

Meanwhile, agents like Holloway are dusting off an old joke about a recovery that goes something like this: "Dear God, give me one more real-estate boom and I promise I won't spend it all on toys."

by Peter Corbett - Jun. 29, 2012 12:27 PM The Republic |

Housing-market crash takes toll Arizona real-estate agents

7 builders commit to Mesa's Eastmark

Builders are spending $50 million to buy the first home lots in Mesa's Eastmark, the former location of the GM Proving Grounds. It's the first major multiple-builder land purchase in a new metro Phoenix community in five years.

Houses on the 709 lots bought by seven builders will be for sale to customers early next year.

At the height of the housing boom in 2006, developer Scottsdale-based DMB paid $260 million for its 3,200 acres of the site, where GM raced Corvettes and tested other cars for decades. But, it was clear by the end of 2007 that the housing market was heading for a serious downturn.

The first round of builders at Eastmark -- Maracay Homes, Mattamy Homes, TaylorMorrison, Woodside Homes, Trend Homes, Standard Pacific Homes and Meritage Homes Corp. -- are buying lots from DMB just as the homebuilding market is starting to recover. Last month, single-family permits and new-home sales were more than double May 2011's levels, according to the Phoenix Housing Market Letter.

"The commitment of these builders represents an unprecedented level of confidence in Arizona's residential market backed by promising economic indicators," said Dea McDonald, DMB's Eastmark general manager. "We are seeing a resurgence in homebuilding activity in Arizona and in the East Valley."

In Mesa alone, homebuilding permits are up 100 percent from last year. A growing number of homebuyers frustrated about being outbid on a shrinking number of short sales and foreclosures are opting for new homes.

The builders had to commit to buying lots in Eastmark two years ago, when the region's housing market was showing no signs of a recovery.

"It was a tough deal to sell to our board back then, but now we all look smart and are trying to take credit for the foresight to commit to land in Eastmark," said Charlie Enochs, TaylorMorrison president.

There is no information about the designs or prices of the homes yet. As in its other meticulously planned communities, including DC Ranch in Scottsdale and Verrado in Buckeye, DMB sets high standards for home designs.

DMB's overall plans for Eastmark include a large commercial hub, retail, a 100-acre central park and several community parks that connect. The first phase of Eastmark will have 12 parks.

When the housing market collapsed, building new homes on its Mesa land fell several slots on DMB's plans for the community, and the developer redoubled its efforts to help bring new jobs and industries to Gateway, the area surrounding Eastmark that includes the Phoenix-Mesa Gateway Airport and Arizona State University's Polytechnic campus.

Economic-development efforts by DMB and Mesa brought a 1.3 million-square-foot First Solar plant to Eastmark last year. The solar-panel facility's opening is on hold as the Tempe-based company deals with falling international demand for its panels.

Plans are still under way for a resort at Eastmark. In 2008, Gaylord Entertainment committed to building a 1,200-room hotel in the community, but it was placed on hold in 2009 in the depths of the recession.

Last month, hotel giant Marriott agreed to buy and manage Gaylord's existing four resorts. Charley Freericks, DMB president, said the company still has an agreement for the resort and hopes to close the deal late this year or early next year.

"As the first large-scale community to launch in Arizona in nearly a decade, Eastmark is being closely watched," he said. "We are designing the community with the 'new normal' in mind. People are putting higher values on a sense of community, proximity to employment and environmental stewardship. Each building partner is creating designs specifically for Eastmark."

by Catherine Reagor - Jun. 28, 2012 06:27 PM The Republic |

7 builders commit to Mesa's Eastmark

Low-income Phoenix projects eyed by developers

Developers proposing three multifamily housing projects in central and downtown Phoenix have applied for a combined $5.5 million in low-income housing tax credits that the City Council is expected to approve at its Tuesday meeting.

The U.S. Department of Housing and Urban Development offers the credits as incentives to build low-income rental housing, Recipients get a dollar-for-dollar credit against their federal income tax liability for 10 years.

The three housing projects are:

Madison Gardens: A 133-unit senior housing complex proposed by WESCAP Investments, run by developer William Spreitzer, for 802 E. Missouri Ave., near Seventh Street. WESCAP expects costs to total $27 million. The company seeks $2 million in city housing tax credits.

Highland Metro Apartments: DESCO Affordable Housing, run by Dave Slattery, proposes renovating a 32-unit apartment complex at 912 W. Highland Ave. southeast of Camelback Road and 15th Avenue, and to add a 32-unit complex to a 32-unit complex at 720 W. Coolidge St. near Seventh and Highland avenues. DESCO estimates costs will total $11.6 million, and it seeks $1 million in credits.

Garfield Sacred Heart: DESCO Affordable Housing also wants to acquire and rehabilitate this property at 16th and Portland streets in downtown Phoenix's historic Garfield neighborhood. The 100-unit complex would house veterans, and development could cost $18.5 million. DESCO seeks up to $2.5 million in tax credits.

Qualified renters

Qualifying renters earning 50 percent or less of the Maricopa County area's median gross income would include an individual earning $23,250 a year or less, a couple earning $26,600 a year or less, a family of three earning $29,900 a year or less, and a family of four that earns $33,200 a year or less.

More details are online:

by Emily Gersema - Jun. 29, 2012 02:28 PM The Republic |

Low-income Phoenix projects eyed by developers

Labor an issue for housing industry -

Many in Arizona's homebuilding industry have been concerned about Senate Bill 1070 since it passed two years ago. Thousands of undocumented immigrants picked up stakes and left the state then, and many of those people worked in the construction industry.

The Supreme Court's ruling on Monday struck down three of the key parts of the law but validated the part that allows a law-enforcement officer to try to determine the immigration status of people stopped or arrested, if there's reasonable suspicion they are in the country illegally.

In 2010, the housing market had crashed, the nation was dealing with the effects of the recession and homebuilding in metro Phoenix had slowed to its lowest level in decades. But metro Phoenix's housing market is recovering. Homebuilding is picking back up, and more construction workers are needed. New-home permits are on track to reach 14,000 this year, double last year's pace. And many homebuilders are optimistic that demand for their houses will continue to steadily grow next year.

Michael IlesCremieux, vice president of land acquisitions at Scottsdale-based Meritage Homes Corp., said homebuilders have been talking about a potential labor shortage because of SB 1070 since 2010 and are beginning to see it. He said it would be unfortunate for the state's economy if demand for new homes continues to climb but builders can't keep up because of labor shortages.

Two to three jobs are created for every new house built, according to industry estimates. For more than 50 years, homebuilding has been one of Arizona's biggest economic drivers.

Most homebuilders hire subcontractors to build their houses. Both builders and subcontractors have long maintained they check workers' immigration papers. But they know papers can be faked, and some contractors might not be as vigilant as others.

Andy Warren, president of Scottsdale-based Maracay Homes, believes Arizona's homebuilding industry will have the workers needed to keep up with growing buyer demand. He said people from other parts of the U.S. will learn of job openings here and move for the work.

Also, when the building industry slowed, many of former construction workers stayed in Arizona and found other work. Ask employees at any Home Depot, and many will tell you they worked for subcontractors or had their own subcontracting business four or five years ago.

Whether what remains of SB 1070 keeps some needed construction workers out of Arizona won't be known for months. If new-home buyers have to wait a year after signing a contract before they can move in, that could be a sure sign.

by Catherine Reagor USA Today Jun 30, 3012

Labor an issue for housing industry -

Builders bullish on local housing market

Metro Phoenix's housing-market recovery has spread to the new-home market. Building permits, new-home sales and prices have been climbing steadily this year. All are long-awaited positive signs for one of Arizona's biggest and most-important industries.

Last week, seven builders finalized deals to spend more than $50 million on home lots in the new Mesa community Eastmark, a project being developed by DMB Associates.

The executives visited The Republic to offer details on the project, but the conversation was much broader, including forecasts for the Arizona housing market, homebuyers' evolving needs, homebuilding's economic impact and the construction industry's future. Some of the key points made by the group:

The number of new homes built across metro Phoenix is expected to nearly double this year compared with 2011, to 14,000.

The construction of one new home creates two to three jobs.

Metro Phoenix's housing market has become a bellwether for a national real-estate recovery.

The group included: Charley Freericks, president of Scottsdale-based DMB; Dea McDonald, general manager of Eastmark; Charlie Enochs, division president, Taylor Morrison; Michael IlesCremieux, vice president of land acquisitions at Meritage Homes Corp.; Paul Kroff, division manager of Woodside; and Andy Warren, president of Maracay Homes.

Question: Describe the state of Phoenix's housing market now. How does this region's recovery compare to the rest of the nation?

Enochs: "Phoenix is definitely on the leading edge of the recovery. We have seen remarkable sales velocity and price increases."

Warren: "We are very fortunate in Phoenix because investor demand has cleared out the backlog of foreclosures. That has helped us transition out of a distressed market to more healthy one quicker than other parts of the country."

IlesCremieux: "Many investors locally and nationally are saying Phoenix is the bellwether for a homebuilding market coming out of the recession."

Kroff: "We are bullish on Phoenix's homebuilding market. We knew the pendulum would swing back, and investor demand for foreclosures helped the market recover faster."

Freericks: "It's always easy to over judge Phoenix on the upswings and downswings. But now we are seeing positive signs on every front (of real estate)."

McDonald: "There is shift from resales to new-home sales. We don't manufacture the market. We follow builders closely to see what deals they can do and what makes sense for their business and homebuyers."

Q: What about new-home prices? Builders have been able to keep new-home costs low due to inexpensive lots that were taken back by lenders, but there are few of those lots left in metro Phoenix.

Enochs: "We have been working off a supply of lower-priced lots for a while, but prices are now gradually going up. But even with lot and home prices going up, Phoenix homes are still an incredible value compared to six years ago."

Freericks: "We are a wholesaler of a product that goes into builder machine and becomes another product. There's always a point in a cycle when inexpesive land starts running out. I think we are in the middle of that transition."

Warren: "Consumers hear about great foreclosure and short sales in metro Phoenix, but then they get out there and are outbid by investors. Those are the people buying new homes."

Q: Have too many investors bought homes in metro Phoenix during the crash?

Freericks: "Most investors are paying cash and not concerned about sitting on an investment they have to move. Those investors have no incentive to dump houses. Also, I don't see the person buying a new home competing with investors."

Warren: "My hunch is there won't be a glut of investor-owned homes that go on the market at once. My hunch is investors will moderate out the sale of their homes. People get scared of investors because of the last round of those buyers from the boom. But these investors paid cash, and their homes won't be foreclosed on."

McDonald: "Look at all the people renting homes now. They don't qualify to buy and need to rent."

Q: Are metro Phoenix home prices recovering enough for more regular homeowners to finally sell?

Kroff: "I have noticed in the past couple of weeks more new for-sale signs in neighborhoods. More owners are likely putting their house on the market and seeing what its value actually is now."

Q: Why buy land in a new community like Eastmark now? Homebuilding is picking up but still well below what is considered a healthy market for metro Phoenix.

Kroff: "Homebuilders have been making a living on these broken projects buying from banks and investors who don't have a comprehensive plan. What has been missing is a comprehensive master-planned, thought-out-from-beginning-to-end project that a builder can partner with a developer on."

IlesCremieux: "When DMB launches a new community, most builders' ears perk up, and they pay attention. It's competitive for homebuilders to get into a DMB community. We are in Verrado (in Buckeye) and have had great success selling higher-end homes during this downturn."

Freericks: "It's been more than five years since we have been in our core business of selling lots to homebuilders. It's nice to have money coming in again. We are an innovative company because we like to be. At Eastmark, we saw opportunities of taking examples of all the live-work communities we have have done in the West. We are very excited to take this community to our next level of place making."

Enochs: "We started talking with DMB about Eastmark almost two years ago. Then, it was way over our pricing scheme. But we signed up on the basis of DMB's reputation. Now, we are all trying to take credit for such a good move."

Warren: "Maracay built in DMB's north Scottsdale DC Ranch community and Verrado. It was an easy decision to sign on at Eastmark."

Q: The Supreme Court's ruling on SB 1070 came out last week. Do you think the parts of the law that were upheld will hurt Arizona's ability to re-grow its construction industry? How will the homebuilding market rebound without enough workers?

IlesCremieux: "We can't control the situation with SB 1070. We have to be creative and price-driven. Obviously, we want what's best for the economy, and a lot of us do talk about labor shortage. Every home that's built creates two to three jobs. If we go out and double homebuilder-permit activity, and the demand is out there to buy homes, it would be real shame if we can't take advantage of it."

Warren: "It's just like every other kind of changing market. There's going to be stress points, but American workers are pretty intelligent, ingenious and creative problem solvers. In other parts of the country where people are out of work, they will see openings for construction jobs in Arizona and move here.

"There might be some challenges here and there if we double our permit activity to 14,000 this year, but I see industrious people coming here to take advantage of construction jobs."

Freericks: "Homebuilding is a very efficient market, and construction traders are mobile. People might not be happy to move, but they will move for jobs."

Enoches: "We are having growing pains now, but they won't last."

Q: Over the past several years, builders have had to compete with foreclosures and add value with green-energy efficiencies and other amenities. Will it be more costly to build homes in Eastmark and compete with resales?

Enochs: "Most resales are listed at attractive prices But after multiple bids, those homes sell for 30 to 40 percent more, and then the buyers have to put another 30 percent in to fix them up. That makes the true cost of buying a resale closer to new-home prices, and resales don't come with new-home features like energy-efficient building."

McDonald: "Builders will soon begin submitting their plans for homes in Eastmark. It's too early to pin down pricing."

Freericks: "We are trying to do something interesting and unique with Eastmark. We made a conscious decision early in life as a community builder to be thoughtful of the natural environment of our communities. We think that matters to the consumer. We think even though we are kind of nerdy about it on the design level, consumers get it at a gut level and appreciate it. The building block for our communities since our early days as DC Ranch is great neighborhoods. It will also be in Eastmark."

by Catherine Reagor - Jun. 30, 2012 03:23 PM The Republic |

Builders bullish on local housing market

Valley housing agency closes

The demise of a Mesa community housing agency has punched a hole in the Valley's social-services network even as the region continues to struggle with fallout from the recession.

Housing Our Communities closed its doors last month after a 24-year run during which it helped nearly 2,900 families move into their first homes and offered homeownership counseling and other services to thousands more.

"They've been a great partner for 24 years," said Mesa City Councilman Dave Richins. Now, he said, communities face the question of "how am I going to do homeownership counseling and how am I going to move homeownership along?"

Two factors appear to have contributed to the closure:

Cash-flow problems that led to at least two court judgments for unpaid debt, the larger of which was to Wells Fargo Bank for more than $260,000.

A searing federal audit of Housing Our Communities' administration of federal funds on behalf of Avondale.

"This didn't happen overnight," said Teresa Brice, a social-services veteran who co-founded the agency, then named Housing for Mesa, in 1988.

Brice is now executive director of the Phoenix office of the Local Initiatives Support Group, which facilitates loans for projects to make communities more sustainable.

Brice said her agency had provided a consultant to help the agency in its final months but "ultimately, if you aren't covering the cost of doing business ... cash flow is going to run into some problems, and that's going to be the beginning of a (downward) cycle."

Scathing audit

Brice and John R. Smith, who served as president until retiring in January and was still deeply involved in the agency, said confusing federal rules and delays in government payments are hindering non-profits across the country as they deal with recession-bloated workloads.

Since its inception, much of the agency's lifeblood came from administering federal housing grants for Mesa. Since 2009, the agency had been involved in the Neighborhood Stabilization Program, which Congress passed during the last summer of the Bush administration to combat the wave of foreclosures sweeping U.S. cities.

Mesa received $9.7 million in the first round of the program. Avondale got $2.4 million. The money was funneled through the federal Department of Housing and Urban Development.

Both cities enlisted Housing Our Communities to help administer the program, in which cities buy and rehab foreclosed homes before selling them to income-qualified buyers.

Louis Kislin, program manager for community planning and development in HUD's Phoenix office, said federal oversight of the Neighborhood Stabilization Program has been unusually stringent because of the Obama administration's transparency policies.

That led to a HUD audit dated Feb. 8, 2011, criticizing Mesa's administration of its stabilization funds and demanding reimbursement of about $22,000 that HUD said was improperly spent. Mesa agreed to tighten up its procedures and repay the money.

During that audit, HUD became suspicious of how the agency was handling its share of the program. So in a new audit, HUD zeroed in on work in Avondale.

The report, dated Dec. 8, 2011, was scathing. It said:

Housing Our Communities used a subsidiary, HFM Builders, for the sole purpose of inflating invoices and overcharging the federal government.

HFM Builders "had a prohibited conflict of interest with both the subrecipient (Housing Our Communities) and one of its key officials."

Housing Our Communities' "construction costs appeared significantly excessive and in some cases unnecessary."

Housing Our Communities must either document $787,000 in "ineligible and unsupported costs" charged to the federal program or return the money.

"I don't know of any non-profit that could turn around and pay $750,000-plus," Richins said.

The agency disagrees

The audit did not allege criminal activity, instead recommending "civil or administrative action or both" against Housing Our Communities. It did not name agency officials it said were responsible for the violations.

Smith wrote a lengthy response, saying the agency "strongly disagrees with the findings and recommendations."

"We are quite concerned with the overall tone of the audit report, as its misleading choice of words paints a picture of corruption and greed which is simply not true," Smith wrote.

In response, HUD auditors agreed to tone down the language but stood by their overall findings.

In Avondale's response, the city agreed with some of the findings and questioned others, but it promised to comply with federal guidelines.

Gina Montes, Avondale's neighborhood- and family-services director, said the city's relationship with the agency ended about a year ago. "We haven't had any active contract with them for quite a while," Montes said.

The agency, which also had been administering programs in partnership with Phoenix and other non-profits, said on its website that clients' files have been transferred to the agencies and cities with which it had worked.

Who steps in?

Tammy Albright, Mesa's neighborhood-services director, said Housing Our Communities' closure has added to her department's workload -- not just with the Neighborhood Stabilization Program but with other grants.

"HOC did play a very important role in the administration of some of these grants," Albright said, adding that its demise "eliminated the only company that was producing a homeownership program here in Mesa."

She added, "That's not to say we're not open to somebody else coming in and playing that role."

Sara Farrar, project manager for the Phoenix Neighborhood Services Department, said, "We are very sorry to see them close," noting the agency was successful for nearly a quarter of a century.

It was managing about 100 cases for Phoenix, Farrar said. Those files have been turned back to the city and she said there has been some confusion among clients trying to find out who now will manage their cases.

Farrar said other non-profits provide services similar to Housing Our Communities, and "we're hoping those other agencies will absorb" some of the load.

The question is whom that might be.

Cynthia Dunham, a former Gilbert mayor who now leads the non-profit West Mesa Community Development Corp., said the agency's closure "does leave a big hole in a necessary piece in the city of Mesa."

Dunham said Mesa might work with agencies it already has relationships with because it is becoming increasingly difficult to administer federal grants.

Early this year, Mesa officials signaled they might abandon some of the programs altogether because of federal red tape.

During a March City Council meeting Albright said, "We are constantly getting new rules ... Administering these grants (is) becoming more and more difficult, yet we're seeing less and less money to do that."

Mayor Scott Smith asked, "Are we approaching the point where we just throw up our hands and say, 'Why do this?' "

"We've talked about it," City Manager Chris Brady replied. "It really is getting difficult."

by Gary Nelson - Jul. 2, 2012 10:49 AM The Republic |

Valley housing agency closes

Valley home prices reach 2003 levels -

Metro Phoenix home prices continued to rapidly climb in May.

Median home price up in all categories.

An Arizona State University report shows the median price for single-family homes in the Phoenix area rose in May compared with a year earlier.

The median sales price of a home in the region is up 32percent from May 2011, according to the latest report from W.P. Carey School of Business at Arizona State University.

In May alone, the cost to buy a Phoenix-area house climbed 7percent to $147,000. The region's home prices have rebounded back to early 2003 levels.

More regular buyers and investors coupled with a shrinking supply of homes for sale are propelling metro Phoenix home prices.

ASU housing analyst Mike Orr said in his report that "high demand and low supply" remain the dominant factors in Phoenix's housing market.

The number of homes for sale in the area is down 50percent from May 2011. Currently, 8,550 homes are listed for sale and don't have pending contracts from buyers.

Moderately priced homes continue to draw the most buyers and bids.

"Most houses below $250,000 priced realistically are attracting large numbers of offers in a short time, and many exceed the asking price," said Orr, director of the Center for Real Estate Theory and Practice at W.P. Carey School.

He said a Chandler home recently received 84 offers, and a Glendale home received 95.

The Glendale house closed within four weeks for 17percent higher than the listed price.

"Needless to say, this is not something we would see in a normal market," Orr said.

He said metro Phoenix home prices can't continue to climb at the "extremely fast rate" they have in the past few months.

"The most likely time for prices to stabilize is during the hot summer months of June through September," said Orr.

By Catherine Reagor, The Republic| Jun 28, 2012

Valley home prices reach 2003 levels -

Home prices up in most major cities -

WASHINGTON — WASHINGTON Home prices rose in nearly all major U.S. cities in April from March, further evidence of a housing market that is slowly improving even while the job market slumps.

The Standard & Poor's/Case-Shiller home-price index released Tuesday showed increases in 19 of the 20 cities tracked. That's the second straight month that prices have risen in a majority of U.S. cities.

At the top of the increase list were San Francisco, up 3.4 percent; Washington, D.C., up 2.8percent; and Phoenix, up 2.5 percent. Prices fell 3.6 percent in Detroit, the only city to record a drop from March to April.

Overall, the 20-city measure of national prices rose 1.3 percent in April from March, the first increase in seven months. The month-to-month prices aren't adjusted for seasonal factors. Still, prices in half of the cities are up over the past 12 months.

Phoenix reported the strongest annual home-price increase: 8.6 percent. Atlanta experienced the biggest annual drop, down 17percent.

Prices are increasing as the housing market has slowly started to recover. Sales of new and previously occupied homes are up over the past year, in part because mortgage rates have plunged to the lowest levels on record. Builders are more confident and are starting to build more homes.

Consistent price increases benefit the broader economy. Homeowners feel wealthier, encouraging them to spend more. Rising prices also encourage more Americans to buy homes because they are confident that their investment will appreciate over time.

"If you are no longer quite so afraid that prices are going to fall, you are more likely to buy," said Pierre Ellis, a senior economist at Decision Economics.

Major homebuilder stock prices ended the day up sharply.

The S&P/Case-Shiller monthly index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The April figures are the latest available.

Even with the gains, the index is 34 percent below its peak reached in the summer of 2006, at the height of the housing boom. Based on the 20-city index, home prices are now at about the same level as in early 2003.

The weaker markets continue to weigh on national prices. A measure of prices for all 20 cities fell 1.9 percent over the 12 months that ended in April.

Still, other measures show home prices have risen nationally during that period.

CoreLogic, a private firm, calculates that prices rose 1.1 percent nationally in those 12 months. The Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, says prices have increased 3 percent in that time.

Recent data indicate that the housing market has started to recover more than five years after the bubble burst. In May, builders requested the highest number of permits to build homes and apartments in 31/2 years.

The supply of homes for sale remains extremely low, which has helped stabilize prices. The inventory of previously occupied homes is back down to levels last seen in 2006. And there were 145,000 new homes for sale in May. That's only slightly higher than in April, which was the lowest supply on records dating back to 1963.

Despite the modest gains in housing, the broader economy has weakened in recent months. Some economists worry that the sluggish job market could weigh on home sales.

By Christopher Rugaber, Associated Press Jun 26, 2012

Home prices up in most major cities -

Homebuilders' stocks up amid rise in home prices -

NEW YORK — NEW YORK Homebuilders led stocks up on Tuesday, helping major indexes recoup some losses from the day before. Rupert Murdoch's News Corp. surged after the media conglomerate said it may split into two companies.

The Dow Jones industrial average rose 32.01 points, or .03percent, to 12,534.67.

PulteGroup, Lennar and other housing stocks climbed following news that a measure of national home prices rose 1.3 percent in April, the first increase in seven months. The Standard & Poor's/Case-Shiller home-price index showed a rise in 19 out of the 20 major cities tracked; Detroit was the only city where prices fell.

PulteGroup rose 49 cents to $9.72 and Lennar rose 81 cents to $27.39.

"There's some good news out there, especially if you look at the housing market," said John De Clue, regional investment director of U.S. Bank's wealth-management unit in Minneapolis. "But there's this overriding theme: concerns over global growth. Things are pretty much slowing everywhere you look."

News Corp. jumped 8 percent. The company confirmed that it's contemplating a breakup into two publicly traded companies. The split would divide its publishing from its entertainment businesses. The media empire includes the Wall Street Journal, Fox News Channel, and newspapers in Britain and Australia. News Corp.'s stock leapt $1.68 to $21.76.

In other trading, the broader Standard & Poor's 500 index gained 6.27, or 0.5percent, to 1,319.99. The Nasdaq composite rose 17.90, or 0.6percent, to 2,854.06.

Investors sold coal company stocks after S&P lowered the credit rating for James River Coal deeper into junk status, citing weaker demand for coal. Utilities have favored natural gas instead of coal to generate electricity and are also preparing for new emission standards.

by Associated Press Jun 26, 2012

Homebuilders' stocks up amid rise in home prices -

New-home sales pick up pace -

WASHINGTON — WASHINGTON Americans bought new homes in May at the fastest pace in more than two years. The increase suggests a modest recovery is continuing in the U.S. housing market, despite weaker job growth.

The Commerce Department said Monday that sales of new homes increased 7.6percent in May from April to a seasonally adjusted annual rate of 369,000 homes. That's the best pace since April 2010, the last month that buyers could qualify for a federal homebuying tax credit.

Even with the gains, the annual sales pace is less than half the 700,000 that economists consider to be healthy. Yet the increase follows other signs that show the housing market is slowly improving nearly five years after the bubble burst.

Builders are gaining confidence in the market and starting to build more homes.

Mortgage rates have plunged to the lowest levels on record, making homebuying more affordable. Prices remain low and have started to stabilize. And sales of previously occupied homes are much higher than the same time last year.

Though new homes represent less than 20 percent of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.

One reason prices could rise is the supply of new homes for sale remains extremely low. Just 145,000 new homes were for sale in May. That's not much higher than the 144,000 available in April, the lowest supply on records dating back to 1963.

At the current sales pace, it would take 4.7 months to exhaust the May supply. A six-month supply is generally considered healthy by economists.

by Associated Press Jun 26, 2012

New-home sales pick up pace -

Phoenix neighbors cautious about buyer's decision to preserve Wright home

This house in Phoenix's Arcadia district was designed by master architect Frank Lloyd Wright in the early 1950s.
Mark Henle/The Republic This house in Phoenix's Arcadia district was designed by master architect Frank Lloyd Wright in the early 1950s.

Neighborhood leaders and Frank Lloyd Wright conservators say they're cautious about a buyer's decision to preserve an important Arcadia landmark, but all agree it is a step in the right direction.

Last week, the Gladys and David Wright House, southwest of 56th Street and Camelback Road, appeared to be in jeopardy as prospective buyers had plans to redevelop the 2 acres. The house was designed and built by Frank Lloyd Wright for his son David.

David Wright House | Frank Lloyd Wright homes

The Frank Lloyd Wright Building Conservancy responded by requesting historical designation for the building from the city of Phoenix to stave off demolition, at least temporarily.

The plans to redevelop remain, but officials with 8081 Meridian, the company that owns the property, say they plan on working with the city and the conservancy to preserve the home.

Janet Halstead, executive director of the conservancy, said she is pleased that the buyers have no plans for demolition.

She said discussion about the house with the buyers, Steve Sells and his business partner, John Hoffman, of 8081 Meridian, will begin this week.

Sells told the The Republic last week that he initially was unaware of the home's significance.

A number of people came forward last week in support of preservation, including Phoenix Mayor Greg Stanton.

Halstead said an outpouring of response to the group's concern was a key.

"It's great news, and preservation is the right thing to do, and we're looking forward to discussing our recommendations about the future of the house with the buyers," she said. "Furthermore, the response from the Phoenix community, preservation groups, designers and the mayor's support of Midcentury Modern architecture in this dialogue has been invaluable in getting to this point."

Arcadia neighborhood leader Paul Barnes said the buyers could still technically tear down the house, but there would be tremendous pressure if they decided to do so.

"I'm not being negative, but there's still more work to be done," Barnes said. "However, the response was quick and substantial. It was a successful first step, but there are still other steps to be taken."

The Gladys and David Wright House is part of Wright's rich legacy in Arizona, where he spent a great deal of his working life, designed residences in the Valley, Taliesin West in Scottsdale and ASU Gammage, an auditorium on the school's Tempe campus.

He built the Arcadia home in the early 1950s. David and Gladys Wright lived there for more than 40 years.

Key features of the residence include a spiral plan, spiral ramps and elevated living quarters. The circular style is featured in New York's Guggenheim Museum, one of Wright's most famous works. The elevated living quarters take advantage of breezes, making it suitable for desert living.

Thomas A. Payton, a Phoenix architect who studied at the Frank Lloyd Wright School of Architecture, said he's pleased to hear the buyers want to save the building.

"This house stands out among Wright's best residential works and has historical significance because of its unique design specializing in the Arizona desert," Payton said.

by Philip Haldiman - Jun. 20, 2012 02:20 PM The Republic |

Phoenix neighbors cautious about buyer's decision to preserve Wright home

Phoenix foreclosure registry considered

Phoenix is looking into starting a foreclosed-home registry that proponents say would speed up the city's hunt for owners whose foreclosed properties are full of trash, surrounded by broken fences or that otherwise violate city ordinances.

Some council members said they like the idea of the registry, noting that the Phoenix area continues to have one of the highest foreclosure rates in the country, and the city has received a constant stream of neighbors' complaints about blight.

"This is something that the city of Phoenix will take a hard look at," said Councilman Daniel Valenzuela, whose west Phoenix district includes the foreclosure-stricken community of Maryvale.

Last month, metropolitan Phoenix had 2,001 foreclosures, according to real-estate tracker AZ Bidder.

A community organization, Living United for Change in Arizona, pitched the idea of the registry this week to the Phoenix City Council's neighborhoods and housing subcommittee.

"We know there are vacant properties that have been vacant a year, year and a half, two years -- and the issue of public safety is a real concern," said Monica Sandschafer, the group's executive director.

Other cities and counties around the country have started foreclosure registries to better monitor the problems often associated with vacated properties: blight, vandalism, transients and, in some of the worst cases, house fires.

Los Angeles, for one, began in 2010 requiring owners to register their foreclosed properties every year at a cost of $155 per application. Owners who fail to comply face fines of up to $250 a day.

Mesa considered launching a similar registry a few years ago, during the aftershocks of the housing market crash. City officials ultimately rejected the idea, saying it would be burdensome to manage.

Phoenix staff members have similar qualms but said they will study the issue and report back to the council subcommittee in the fall.

The Arizona Bankers Association has already reached out to Phoenix council members to raise concerns about the proposed registry, said Paul Hickman, the group's CEO and president.

"I would urge caution," he said. "I would be very careful in getting close to requiring noteholders to maintain properties that they do not have the legal authority to enter. A bank can hold the note but not own the property."

City staff are expected to present their study on a foreclosure registry to the City Council in the fall.

In most states, the county recorder offices process the paperwork for foreclosed properties.

Sandschafer said that although the Maricopa County Recorder's Office does its best to keep pace with the fast rate o f foreclosures, there is usually a lag -- sometimes 30 days or longer -- before the foreclosure documents are processed and stored in the records database.

Contrary to public perception, the Maricopa County Recorder's Office receives and posts on its website usually within an hour of receipt foreclosure documents that have been properly completed, said Leann Wade, an office manager for the Recorder's Office.

Wade said that for paper documents, the office usually posts them online within 24 hours of receipt.

"Eighty percent of our documents are received electronically," Wade said. "Those are recorded instantly that day and made available on our website right then."

Councilman Tom Simplot, who represents an area of central Phoenix, said identifying owners of foreclosed properties is the hard part.

Lienholders' names are often buried in a tangle of paperwork, he said.

After the home's value begins an upswing, the lienholder will declare ownership of the foreclosed home and prepare it for sale.

Because of this, foreclosure counts "are misleading," Simplot said.

Foreclosures have dropped by half since last May, when the metropolitan Phoenix area had more than 4,000 foreclosures, according to AZ Bidder. Simplot, though, does not believe Phoenix is out of the thick of the housing crash.

"There are still a lot of foreclosures to come," he said.

Eryn Crowley, deputy director for the city's preservation division, said the Phoenix area has one of the highest numbers of homeowners in the country who are upside down on their properties. At least 50 percent of its homeowners are in this conundrum, she said.

"Phoenix has been especially hard hit, but not all properties that go through the foreclosure process have code violations," Crowley said.

by Emily Gersema - Jun. 21, 2012 09:33 PM The Republic |

Phoenix foreclosure registry considered

U.S. builder confidence ticks up to 5-year high

WASHINGTON -- Confidence among U.S. builders ticked up this month to a five-year high, an indication that the housing market is slowly improving.

The National Association of Home Builders/Wells Fargo builder sentiment index rose in June to 29, the highest reading since May 2007. It increased from a reading of 28 last month, which was revised down one point from its initial figure.

The index, which was released Monday, has risen in seven of the past nine months, suggesting builders are starting to see the seeds of a recovery taking shape after years of stagnation.

Yet, the market has a long way to go. Any reading below 50 indicates negative sentiment about the housing market. The index hasn't reached that level since April 2006, the peak of the housing boom.

In June, builders reported seeing the best sales level since April 2007, according to a separate measure in the survey. Their outlook for sales in the next six months, however, hasn't changed from May.

Cheaper mortgages and lower home prices in many markets have made home buying more attractive. Many economists believe that housing construction could contribute to overall economic growth this year for the first time since 2005.

Sales of both previously occupied homes and new homes rose near two-year highs in April. And builders are breaking ground on more homes and requesting more permits to build single-family homes later this year.

Jennifer Lee, senior economist for BMO Capital Markets, said that June reading on builder sentiment was welcome news. She said even with recent weak readings on employment, builders' outlook for sales over the next six months did not decline and foot traffic remained the same.

Still, the pace of home sales remains well below healthy levels. Economists say it could be years before the market is fully healed.

Many Americans are still having difficulty qualifying for home loans or can't afford larger down payments required by banks. Some would-be home buyers are holding off because they fear that home prices could keep falling.

The economy is growing only modestly and job creation slowed sharply in April and May. U.S. employers created only 69,000 jobs in May, the fewest in a year.

Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to Home Builders' data.

by Martin Crutsinger - Jun. 18, 2012 09:19 AM AP Economics Writer

U.S. builder confidence ticks up to 5-year high

Mesa developer's new tactic: Build jobs, then homes

It will be another year before houses go up on one of the last large pieces of residential land in Mesa, even though the developer bought it six years ago.

The former General Motors Co. proving ground in east Mesa sold at the height of the housing boom amid a fanfare of development plans and with images of the site becoming a new city at the metro region's eastern edge.

Today, the site has become a case study in post-boom housing business and the search for new jobs and new industries in post-recession Arizona.

The push to grow new jobs -- and the delay in building housing -- has been planned, but this wasn't the original plan.

When Scottsdale-based developer DMB paid GM $260 million for the 3,200-acre property in 2006, new housing subdivisions were already springing up on surrounding parcels.

In summer 2007, a town-hall meeting in downtown Mesa focusing on the proving-ground redevelopment drew hundreds from the real-estate industry. At the event, excitement over the project was most apparent among homebuilders, who asked about design requirements and when the first lots would be for sale.

By the end of that year, the picture had changed for homebuilders.

In 2008, developers and homebuilders began giving land back to the banks or going out of business. Privately held DMB suffered, too, slowing its projects and eventually laying off a third of its staff. The long-standing model of building new homes farther and farther outside metro Phoenix stopped working.

As the housing market went from slowing to a crash, it became clear to the developer that Arizona's model of building homes was broken.

The developer began focusing on the future of the surrounding area.

DMB's Eastmark community is part of Mesa's Gateway area, already home to an airport and a rapidly growing Arizona State University campus.

An existing commercial base on Power Road lies a few miles west. And just east is a huge piece of vacant state land already planned for development.

"Building homes dropped on our priority list in Eastmark during the crash, and building a bigger regional economy became the obvious priority," said Drew Brown, a founding partner and chairman of DMB.

During the recession, DMB shelved its plans for homes and began working to draw big employers to the Gateway region, keep other large firms in the area and work with other communities in the southeast Valley to build the infrastructure needed to support future growth.

"DMB is taking the responsible approach to developing Eastmark, instead of incrementally building subdivisions," said Mark Stapp, director of the Master of Real Estate Development program at the ASU's W.P. Carey School of Business and a former developer.

"The company is trying to raise the economy for the entire region and thinking about the last parcel it sells, instead of the first parcel," Stapp said.

DMB realized in 2007 that to fill a large development far from metro Phoenix's core with as many as 100,000 people, its east Mesa community would first need much more than housing.

Change of plans

The development would need jobs, shopping and an urban-style infrastructure with parks, high-rise condominiums and other amenities that residents and employees wouldn't have to drive to downtown Tempe to find.

In 2008, Gaylord Entertainment committed itself to building a 1,200-room resort in the community. But that project was placed on hold in 2009 after the economy fell into a recession.

The developer started working more with the area's growing Phoenix-Mesa Gateway Airport, ASU's Polytechic campus and the surrounding communities of Chandler, Gilbert and Queen Creek.

DMB executive Karrin Kunasek Taylor, who grew up just a few miles from the East Valley site, helped form Arizona's Aerospace and Defense Initiative partly to ensure that large Valley employer Boeing could keep testing its Apache helicopters in the Gateway area without flying afoul of new development.

The state aerospace group and developer also has worked with the military, taking one of the Air Force's top generals on a tour of the region. The effort helped bring a government contractor's record-keeping lab and 250 jobs to the area.

Last year, Tempe-based First Solar broke ground on the first phase of a 1.3 million-square-foot plant at Eastmark.

"DMB took the downturn as an opportunity to readjust its plan and focus on the economic development of its community before housing," said Mesa Mayor Scott Smith, a former homebuilder.

A new look

The 50-year-old proving ground for Corvettes and other GM-made cars was far from the Valley development and the prying eyes of competitors when it opened. But, by 2006, GM saw growth headed too close to the proving ground and decided to sell. The carmaker moved its western proving ground to Mexico.

Only a year ago, most of Eastmark looked like a huge junkyard with piles of scrap metal and old drywall and miles of torn-up asphalt lying around. DMB took a few years to tear up the former proving ground, recycling most of the scrap.

Now, where the tracks formerly lay, DMB is building the infrastructure of Eastmark -- "the streets, utilities and early amenities to prepare for future businesses and the homebuilders," said DMB's Eastmark general manager, Dea McDonald.

DMB is known for building infrastructure and amenities in its large developments early on.

The Urban Land Institute, a Washington, D.C.-based real-estate think tank, calls the developer's DC Ranch/Silverleaf community in north Scottsdale one of the nation's best planned large mixed-use projects.

The community has a mix of high-end and midrange houses, apartments, retail space, office complexes, schools, trails up to the mountains, and lots of parks and walkways connecting all the neighborhoods.

Verrado, DMB's 8,800-acre Buckeye development modeled as a more-affordable DC Ranch, opened in 2004 with record sales for two years until the crash.

It wasn't difficult for DMB to draw regional support for economic-development efforts.

The southeast Valley has seen the most new homes built in metro Phoenix during the past two decades.

But the area's job growth has significantly lagged its new housing. Estimates vary, but at least 35 percent of metro Phoenix's population is in the southeast Valley, while less than 20 percent of the region's jobs are located there.

DMB President Charley Freericks said so much has changed in the Gateway area, it's easy to forget the area was formerly Williams Air Force Base. "Eastmark will help redefine the Gateway area," he said.

Future in flux

Today, five years after that town-hall meeting, not a single foundation has been poured for a house on the site.

There has been plenty of preparation work, but the plans for what comes next are fluid.

Eastmark's resort is still on hold, though Gaylord executives visited Eastmark with Smith, the mayor, earlier this year. Last month, hotel giant Marriott agreed to buy and manage Gaylord's existing four resorts.

DMB executives plan to meet with Marriott later this year.

First Solar has delayed the opening of its solar-panel fabrication plant after laying off 2,000 people earlier this year.

Still, the region's economic supporters are counting on the plant's development as an example to draw more big employers.

ASU's Polytechnic campus has doubled its enrollment to more than 10,000 in the past six years.

Gateway Airport is still quite small compared with Phoenix Sky Harbor International Airport, but the number of passengers flying in and out of the Mesa airport is up 50 percent from last year.

Smith compares the Gateway area, including Eastmark, to Irvine, Calif., calling it an "aerotropolis" that will evolve over decades.

Recently, construction started on a new freeway in the southeast Valley. The first mile of Arizona 24 will link Loop 202 to the Gateway area.

DMB hopes to sell 800 houses next year. During the next few decades, plans call for 15,000 homes, including high-rise condos, houses next to golf courses, and townhouses.

East of Eastmark in Pinal County is the state-owned Superstition Vistas project. In 2006, planners, southeast Valley government officials and the State Land Department developed a plan for the 275-square-mile site with the hope of landing a developer by year-end. That project has been on hold since the housing crash.

But housing analysts say that if jobs and then housing come to Eastmark and Gateway, it could lead to the development of Superstition Vistas.

Arizona housing analyst RL Brown calls Eastmark "a game changer" for residential development in metro Phoenix.

"What DMB is doing at Eastmark by bringing jobs and a community core first will change the way homebuyers and builders think in the future," he said.

by Catherine Reagor - Jun. 18, 2012 11:13 PM The Republic |

Mesa developer's new tactic: Build jobs, then homes

Developers praise Paradise Valley's eased project-application process

Developers interested in bringing new resort projects or improving existing ones in Paradise Valley now face a less onerous town application process.

Officials involved in several resort projects have experienced the new process and sing its praises, including representatives of the shuttered Mountain Shadow's resort, which recently had its permit reactivated.

All three have long done business with the town.

Councilman Michael Collins said town officials have been revising the permitting process for a number of years and the result has been projects moving quicker to completion.

Resort projects are vetted by the town through a special-use permit process.

Revising the process began in 2008 when the Planning Commission and Town Council changed the SUP ordinance to make it easier for applicants to come to the town for small or midsize projects by cutting the red tape associated with the approval process, Collins said.

"Since then, the council has passed several measures to refine the process into a timely application review," he said.

"The goal was to stimulate resort redevelopment in PV that is compatible with our residential lifestyle."

Nicholas J. Wood, a lawyer representing the JW Marriott Camelback Inn, said the permit to redesign the resort's Indian Bend golf course was one of the first under the town's revised SUP process.

The new design will include alternate tee-box locations, restructuring of individual holes, new and reconfigured golf cart paths, new sand traps and berms, as well as reconfigured water obstacles.

It will be completed in 16 months.

The application for the new golf course design was filed March 28 and approved by the Town Council June 7.

Wood said a typical zoning case takes four to six months to complete.

"That is incredibly fast," he said. "It was a great process and a tremendous experience."

Within two weeks, the golf course will shut down for construction, he said.

Collins said the town has had a long history of being very hard on SUP applicants, which morphed into a very cumbersome and, some say, obstructionist process.

"I think it was originally meant to protect the unique residential lifestyle that PV residents enjoy," he said.

Collins cited the Ritz-Carlton proposal and the previous Mountain Shadows applications as taking more than a year to review.

Both developers ended up spending millions of dollars and never got their resorts built, he said.

by Philip Haldiman - Jun. 18, 2012 08:11 AM The Republic |

Developers praise Paradise Valley's eased project-application process

Area's home market hot -

Javier Vidana is only 19. But with his investor father's cash, he was ready to make an offer on a three-bedroom, 2½ bath home in Peoria on Thursday.

"I love it already," said Vidana, who rents a room in a Phoenix house. "I don't want to be living in a little room anymore."

His real-estate agent, Jesse Abarca, said Vidana and his father will have to be ready to make a solid cash offer literally the hour the house hits the market. Even then, they could get outbid.

"The game is to get an offer in as soon as possible to avoid the other bidders," said Abarca, who works for Re/Max Professionals in Glendale.

For real-estate agents, homebuyers and especially homesellers, the West Valley is burning up, especially for homes less than $150,000.

"The West Valley is really, really a hot market," said Chris Heagerty, director of the Arizona Regional Multiple Listing Service Inc.

That heat is strongest in the market for homes of $100,000 to $150,000, forcing new buyers to move to higher ranges.

The sellers of the small, empty house Vidana has his eye on are aiming it at the hottest part of the investor's market -- homes from $110,000 to $130,000.

Distressed properties, those houses owned by people facing foreclosure or short sales, still make up the bulk of sales. But ARMLS statistics show they have decreased in metro Phoenix to about 43 percent in May. That's a drop compared with their high-water mark in September 2010, when distressed properties made up 74 percent of homes sold.

An equally significant number is the ratio of short sales -- in which a home sells for less than is owed on its mortgage -- to foreclosure. ARMLS statistics show that metro Phoenix had 2,245 short sales in May compared with 1,423 foreclosures. Short sales increased that month by 5.5 percent over April figures, while foreclosures decreased by 1.9 percent.

By Lesley Wright, The Republic| Jun 16, 2012

Area's home market hot -

Developer's vision of downtown Scottsdale coming into focus

Love it or hate it, developer Shawn Yari is gradually reaching his goal of transforming downtown Scottsdale's entertainment district to match his long-term vision.

That vision involves ridding the area of numerous older buildings and businesses to make way for a live-work-play destination for young professionals. The area, south of Camelback Road and east of Scottsdale Road, includes a high concentration of bars and attracts thousands of patrons every weekend.

Yari, owner of Triyar Cos., has met some resistance as he has unveiled his plans and gone through the city's planning-approval process, but nothing has stopped him so far.

"There's always differences in opinion of how a downtown or even a city should grow," Yari said. "I think that's why we've always had the public-input process of having community open houses. The feedback we've received is overwhelmingly positive, to not only redevelopment for entertainment use, but also redevelopment for residential and the mixed use."

His most outspoken critic remains Bill Crawford, president of the Association to Preserve Downtown Scottsdale's Quality of Life. He lives not far from the W Scottsdale Hotel, a Triyar development that includes a rooftop pool with an outdoor DJ on weekends.

Triyar also developed the Downtown Entertainment Plaza, a restaurant/bar complex on Saddlebag Trail south of Camelback.

"Mr. Yari has put money and influence into his vision of changing the character of downtown Scottsdale," Crawford said. "I see these changes as a departure from Scottsdale's brand and, in some cases, incompatible with Scottsdale's quality of life. Furthermore, myself and other Scottsdale residents and businesses have been adversely affected on a daily basis by the negative impact of Mr. Yari's ventures."

Crawford's criticism of Yari and his projects prompted a lawsuit by the developer alleging defamation and other claims. The suit hasn't progressed since Yari filed it in March in Maricopa County Superior Court.

Yari wouldn't comment on the lawsuit.

Mayor Jim Lane said Yari's vision appears to be striving to meet a demand for those who want to live in the downtown area and have entertainment options nearby.

"And it is to a new demographic that we're, to some degree, accommodating. And I think that's part of how the city transitions a little bit, while sensitive to the existing, but nonetheless while trying to meet demand," he said. "The marketplace does sort of give us a guide on this, and frankly as time goes on, if you're not responsive to the marketplace, that's when areas die."

Sonnie Kirtley, chairwoman of the Coalition of Greater Scottsdale, a citizen and small-business owners advocacy group, said the city should have a plan in place to guide redevelopment in the entertainment district.

"Project approval on a case-by-case basis is the problem," she said. "The city has failed to plan a specific entertainment district with appropriate growth and impact guidelines. Hopefully, new council members will understand the urgency and establish a designated district."

Taking shape

Demolition is under way to clear most of the city block that housed Myst nightclub on Shoeman Lane and Suede restaurant/bar on Indian Plaza to make way for Triyar's Scottsdale Retail Plaza, an entertainment complex with an indoor-outdoor pool club in the center.

The Development Review Board gave its final approvals to the project last week. The complex is set to open in the first-quarter of 2013.

Yari has two projects in the pipeline that would bring 320 apartment units to the district. Industry East (188 units plus retail) and Industry West (132 units plus retail) are in the early stages of the city's planning-approval process.

The complexes would be on the north side of Stetson Drive between Wells Fargo Avenue and 75th Street.

"Industry East and Industry West will serve as medium-price-point rental product, and they're high quality," Yari said. "People can live there and enjoy the different venues that are there now and will exist in the future. Also, they can work in the numerous businesses that are located in this area. It's a true live, work and play community."

The downtown infill-incentive proposals are requesting increased building height and density, and other amended development standards in exchange for public benefits, said senior planner Kim Chafin.

The current zoning allows a maximum building height of 50 feet and five levels, while Triyar is requesting an increase to 70 feet and six levels, she said.

Also, Triyar is seeking permission to provide slightly less parking than is required, four less spaces at Industry East and 13 less at Industry West, Chafin said.

"You are allowed to ask for variations from the regulations, and then to get those you have to propose some sort of public benefit, so we're waiting to see what that benefit will be," she said. "They haven't identified one yet."

Yari hopes to have Industry West under construction in eight to nine months, and plans to build the complexes in phases. The proposals could be considered by the Development Review Board in September, followed by the Planning Commission and City Council.

Back on track

Yari's original vision included a 10-acre, $390 million mixed-use complex southeast of Scottsdale and Camelback roads, with new clubs, restaurants, condominiums, offices, a hotel and a bowling center.

However, the downturn in the economy forced him to rethink his plans and instead focus on growing the same vision, but one project at a time. Triyar also owns other, smaller properties in the entertainment district that later could be pegged for redevelopment.

"We would like high-quality entertainment, high-quality restaurants, upscale residential condos and apartments, and then different ancillary uses of retail, such as breakfast and yoga, workouts and personal training," he said.

Although Yari won't divulge how much Triyar is investing in each project, he did say the investment for the pool club complex alone is in the "substantial eight-figure range."

If managed well, Triyar's plans should be a "positive thing" for all of downtown, Lane said.

Triyar Cos. at a glance

A private umbrella company with offices in Los Angeles and Scottsdale.

Triyar stands for the three Yari brothers -- Shawn, Steven and Bob.

Triyar owns and operates numerous properties in several states, including New York, Texas, California, Indiana and Arizona.

Triyar Entertainment manages the entertainment at the W Scottsdale and other venues.

Triyar Hospitality develops and manages hospitality, retail and office properties across the country.

by Edward Gately - Jun. 14, 2012 02:58 PM The Republic |

Developer's vision of downtown Scottsdale coming into focus

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