Showing posts with label klutznick. Show all posts
Showing posts with label klutznick. Show all posts
Saturday, October 27, 2012
CityNorth developer suing law firm
A prominent Phoenix law firm is the target of a lawsuit claiming its actions put the developer of CityNorth out of business.
The developer, a subsidiary of the Klutznick Co. called Northeast Phoenix Partners, also controlled development rights throughout the 5,700-acre Desert Ridge development in northeast Phoenix.
But Northeast Phoenix Partners, or NPP, lost both CityNorth and Desert Ridge in a lawsuit with another developer, Gray Development Group, resolved earlier this year.
The new lawsuit, filed last week, claims Gammage & Burnham was NPP’s attorney when it advised Gray on how to proceed with an effort to increase residential density on a Desert Ridge parcel north of Desert Ridge Marketplace. The suit says Gammage gave NPP conflicting advice, urging them to oppose Gray’s effort.
Read more: CityNorth developer suing law firm
Tuesday, November 22, 2011
Phoenix, CityNorth developer clash - USATODAY.com
Phoenix's effort to revoke its $97.4million development agreement with the developer of CityNorth has gotten off to a rocky start.
Phoenix sent a letter to an attorney for the Klutznick Co. arguing that Klutznick has defaulted on the terms of the agreement.
Scott Hershman, who said Tuesday that he had not been in contact with the city, responded with a demand for the full amount of the agreement, claiming the city was interfering in the company's contractual rights. He also threatened a lawsuit.
The City Council in October directed city staff to study how to end the contract, which the city spent more than $750,000 in court defending from 2007 to 2010.
The agreement with Klutznick calls for the city to share with the developer half of the sales taxes generated at the northeast Phoenix project for 11 years and three months, or a maximum of $97.4million. The sharing agreement would start after the developer opened 1.2million square feet of retail space, plus parking structures with more than 3,000 free spaces.
An Arizona Republic analysis in 2009 indicated that for the project to bring in $97.4million over its lifetime, it would have to be one of the most successful retail projects in the nation.
CityNorth was envisioned as a $1.2billion project that, upon completion, would have about 6million square feet of mixed-use development. To date, 175,000 square feet of retail has been developed.
If the Klutznick Co. does not agree to walk away from the deal, the city will have to seek a legal settlement.
Meanwhile, Deputy City Manager David Krietor maintains that the agreement will never take effect. No progress has taken place on the project since 2008, when Phase 1 opened.
Phase 1 now is under separate ownership from the remainder of the 144-acre parcel, and a Klutznick Co. subsidiary, Northeast Phoenix Partners, is on the hook for a legal judgment of more than $100million in an unrelated case. It may need to use the land to satisfy the judgment.
by Michael Clancy The Arizona Republic Nov 19, 2011
Phoenix, CityNorth developer clash - USATODAY.com
Phoenix sent a letter to an attorney for the Klutznick Co. arguing that Klutznick has defaulted on the terms of the agreement.
Scott Hershman, who said Tuesday that he had not been in contact with the city, responded with a demand for the full amount of the agreement, claiming the city was interfering in the company's contractual rights. He also threatened a lawsuit.
The City Council in October directed city staff to study how to end the contract, which the city spent more than $750,000 in court defending from 2007 to 2010.
The agreement with Klutznick calls for the city to share with the developer half of the sales taxes generated at the northeast Phoenix project for 11 years and three months, or a maximum of $97.4million. The sharing agreement would start after the developer opened 1.2million square feet of retail space, plus parking structures with more than 3,000 free spaces.
An Arizona Republic analysis in 2009 indicated that for the project to bring in $97.4million over its lifetime, it would have to be one of the most successful retail projects in the nation.
CityNorth was envisioned as a $1.2billion project that, upon completion, would have about 6million square feet of mixed-use development. To date, 175,000 square feet of retail has been developed.
If the Klutznick Co. does not agree to walk away from the deal, the city will have to seek a legal settlement.
Meanwhile, Deputy City Manager David Krietor maintains that the agreement will never take effect. No progress has taken place on the project since 2008, when Phase 1 opened.
Phase 1 now is under separate ownership from the remainder of the 144-acre parcel, and a Klutznick Co. subsidiary, Northeast Phoenix Partners, is on the hook for a legal judgment of more than $100million in an unrelated case. It may need to use the land to satisfy the judgment.
by Michael Clancy The Arizona Republic Nov 19, 2011
Phoenix, CityNorth developer clash - USATODAY.com
Sunday, October 16, 2011
Phoenix seeks to cancel $97.4 million pact with CityNorth
The Phoenix City Council has decided to pursue efforts to end the city's $97.4 million agreement to assist CityNorth's development, an accord that the city spent more than $750,000 in court defending between 2007 and 2010.
The council on Tuesday voted 6-0, with three members absent, to ask the city manager to work out the details.
Councilman Tom Simplot said times have changed since the contract was approved in March 2007. He and Councilman Michael Johnson were the only members present who voted on the contract in 2007. Simplot was a no vote.
"This is the right course for taxpayers," Simplot said.
Johnson, who made the motion on Tuesday, supported CityNorth in 2007.
Councilman Jim Waring, who requested the item be placed on the council's policy agenda, said the agreement has always been controversial. He also noted that it is open-ended, meaning the city could be on the hook in the sales tax-sharing deal forever.
The agreement with the Klutznick Co., developer of CityNorth, calls for the city to share with the developer half the sales taxes generated at the northeast Phoenix project for 11 years and 3 months, or a maximum of $97.4 million. The sharing agreement would start after the developer opens 1.2 million square feet of retail space, plus parking structures with more than 3,000 free spaces. There is no time limit on the agreement.
Bordered on the west by Desert Ridge Marketplace, on the east by 56th Street, and to the south by Loop 101, CityNorth was envisioned as a $1.2 billion project that, upon completion, would have about 6 million square feet of mixed-use development. To date, a total of 175,000 square feet of retail has been developed.
David Krietor, the deputy city manager who oversees economic development, estimated that, given all that has happened since 2007, the agreement would never take effect. His reasons:
- Phase 1, the shops, offices and apartments on High Street, is now separate from the remainder of the project due to a foreclosure.
- Ownership of the remaining land is up in the air as Klutznick, under the corporation known as Northeast Phoenix Partners, may lose it as payment in a lawsuit it lost to Gray Development Group over development of a nearby parcel.
- A future owner would be unlikely to have the same vision of a dense, urban "second downtown" that Klutznick promised to city officials in 2007.
Krietor said the project is far from meeting the required performance criteria.
"The extremely choppy waters of the recession" have virtually derailed the project, he said.
Clint Bolick, an attorney for the Goldwater Institute, agreed with Krietor. Bolick, who filed and lost a lawsuit against the agreement, said Tuesday's decision was "a significant symbolic step" that he hopes "indicates the council has overcome its subsidy addiction."
"This was a grandiose scheme that seemed destined to fail from the beginning," Bolick said.
Krietor said the effort is now up to the city's Law Department, but he could say no more because the issues were discussed in executive session.
Questions that need to be asked include whether the contract sticks with the property or with the Klutznick Co. The developer has mentioned the contract as a possible asset, along with the undeveloped property, that it could use to settle the $160 million legal judgment that it owes Gray.
Klutznick representatives declined to return calls.
by Michael Clancy The Arizona Republic Oct. 14, 2011 12:19 PM
Phoenix seeks to cancel $97.4 million pact with CityNorth
The council on Tuesday voted 6-0, with three members absent, to ask the city manager to work out the details.
Councilman Tom Simplot said times have changed since the contract was approved in March 2007. He and Councilman Michael Johnson were the only members present who voted on the contract in 2007. Simplot was a no vote.
"This is the right course for taxpayers," Simplot said.
Johnson, who made the motion on Tuesday, supported CityNorth in 2007.
Councilman Jim Waring, who requested the item be placed on the council's policy agenda, said the agreement has always been controversial. He also noted that it is open-ended, meaning the city could be on the hook in the sales tax-sharing deal forever.
The agreement with the Klutznick Co., developer of CityNorth, calls for the city to share with the developer half the sales taxes generated at the northeast Phoenix project for 11 years and 3 months, or a maximum of $97.4 million. The sharing agreement would start after the developer opens 1.2 million square feet of retail space, plus parking structures with more than 3,000 free spaces. There is no time limit on the agreement.
Bordered on the west by Desert Ridge Marketplace, on the east by 56th Street, and to the south by Loop 101, CityNorth was envisioned as a $1.2 billion project that, upon completion, would have about 6 million square feet of mixed-use development. To date, a total of 175,000 square feet of retail has been developed.
David Krietor, the deputy city manager who oversees economic development, estimated that, given all that has happened since 2007, the agreement would never take effect. His reasons:
- Phase 1, the shops, offices and apartments on High Street, is now separate from the remainder of the project due to a foreclosure.
- Ownership of the remaining land is up in the air as Klutznick, under the corporation known as Northeast Phoenix Partners, may lose it as payment in a lawsuit it lost to Gray Development Group over development of a nearby parcel.
- A future owner would be unlikely to have the same vision of a dense, urban "second downtown" that Klutznick promised to city officials in 2007.
Krietor said the project is far from meeting the required performance criteria.
"The extremely choppy waters of the recession" have virtually derailed the project, he said.
Clint Bolick, an attorney for the Goldwater Institute, agreed with Krietor. Bolick, who filed and lost a lawsuit against the agreement, said Tuesday's decision was "a significant symbolic step" that he hopes "indicates the council has overcome its subsidy addiction."
"This was a grandiose scheme that seemed destined to fail from the beginning," Bolick said.
Krietor said the effort is now up to the city's Law Department, but he could say no more because the issues were discussed in executive session.
Questions that need to be asked include whether the contract sticks with the property or with the Klutznick Co. The developer has mentioned the contract as a possible asset, along with the undeveloped property, that it could use to settle the $160 million legal judgment that it owes Gray.
Klutznick representatives declined to return calls.
by Michael Clancy The Arizona Republic Oct. 14, 2011 12:19 PM
Phoenix seeks to cancel $97.4 million pact with CityNorth
Sunday, June 6, 2010
CityNorth sale delayed again
by Michael Clancy The Arizona Republic Jun. 5, 2010 12:00 AM
The CityNorth foreclosure sale scheduled for Wednesday was postponed a second time.
The sale has been rescheduled for June 16. It originally was scheduled to occur March 31.
Capmark Financial filed the foreclosure against the owners of CityNorth's High Street in late December. The owners, the Klutznick Co. and Related Urban Development, owe more than $290 million to Capmark.
The foreclosure is believed to be the largest commercial foreclosure in state history.
As before, no reason was given for the postponement. Elizabeth Hibbs of Quarles and Brady, the law firm that is handling the sale, said Capmark can postpone the sale indefinitely.
Capmark has declined comment.
The foreclosure affects High Street, the initial phase of the 144-acre project at 56th Street and Loop 101 in northeast Phoenix.
High Street's shops, restaurants, offices and apartments opened in November 2008.
Subsequent phases were supposed to open annually, but the economic slump derailed those plans.
No construction activity has taken place there in more than a year.
Unknown at this time is whether anyone will step into the void.
The current owners could avoid foreclosure by finding new financing or filing for bankruptcy. Refinancing with Capmark is unlikely, because Capmark is in bankruptcy.
The Klutznick Co. has kept up to date on payments to the Arizona State Land Department on the remainder of the property but has been unable to secure financing for later phases of the project, which would include large department stores, other shops and outdoor areas.
Phoenix's $97.4 million economic-development agreement with CityNorth hinges on completion of Phase 2 as originally envisioned.
CityNorth sale delayed again
The CityNorth foreclosure sale scheduled for Wednesday was postponed a second time.
The sale has been rescheduled for June 16. It originally was scheduled to occur March 31.
Capmark Financial filed the foreclosure against the owners of CityNorth's High Street in late December. The owners, the Klutznick Co. and Related Urban Development, owe more than $290 million to Capmark.
The foreclosure is believed to be the largest commercial foreclosure in state history.
As before, no reason was given for the postponement. Elizabeth Hibbs of Quarles and Brady, the law firm that is handling the sale, said Capmark can postpone the sale indefinitely.
Capmark has declined comment.
The foreclosure affects High Street, the initial phase of the 144-acre project at 56th Street and Loop 101 in northeast Phoenix.
High Street's shops, restaurants, offices and apartments opened in November 2008.
Subsequent phases were supposed to open annually, but the economic slump derailed those plans.
No construction activity has taken place there in more than a year.
Unknown at this time is whether anyone will step into the void.
The current owners could avoid foreclosure by finding new financing or filing for bankruptcy. Refinancing with Capmark is unlikely, because Capmark is in bankruptcy.
The Klutznick Co. has kept up to date on payments to the Arizona State Land Department on the remainder of the property but has been unable to secure financing for later phases of the project, which would include large department stores, other shops and outdoor areas.
Phoenix's $97.4 million economic-development agreement with CityNorth hinges on completion of Phase 2 as originally envisioned.
CityNorth sale delayed again
Sunday, April 4, 2010
CityNorth foreclosure sale postponed until June
CityNorth foreclosure sale postponed until June
by Michael Clancy The Arizona Republic Mar. 30, 2010 01:49 PM
A foreclosure sale of CityNorth's High Street that was scheduled for Wednesday was postponed at the last minute.
The sale now will take place on June 2.
The sale was postponed at the request of the lender, Capmark Financial. Capmark, which is in bankruptcy, filed foreclosure against the owners of CityNorth in late December.
The CityNorth group, which includes the Klutznick Co. and Related Urban Development, owes more than $290 million to Capmark.
No reason was given for the postponement.
High Street, the initial phase of the 144-acre project at 56th Street and Loop 101 in northeast Phoenix, opened in November 2008. Subsequent phases were supposed to open annually, but the economic slump put an end to those plans.
High Street includes apartments, offices, restaurants and retail.
Currently, future work at CityNorth is on hold, pending financing for new phases.
by Michael Clancy The Arizona Republic Mar. 30, 2010 01:49 PM
A foreclosure sale of CityNorth's High Street that was scheduled for Wednesday was postponed at the last minute.
The sale now will take place on June 2.
The sale was postponed at the request of the lender, Capmark Financial. Capmark, which is in bankruptcy, filed foreclosure against the owners of CityNorth in late December.
The CityNorth group, which includes the Klutznick Co. and Related Urban Development, owes more than $290 million to Capmark.
No reason was given for the postponement.
High Street, the initial phase of the 144-acre project at 56th Street and Loop 101 in northeast Phoenix, opened in November 2008. Subsequent phases were supposed to open annually, but the economic slump put an end to those plans.
High Street includes apartments, offices, restaurants and retail.
Currently, future work at CityNorth is on hold, pending financing for new phases.
Subscribe to:
Comments (Atom)
 |
Posts
