Solis site goes for $30 million

An 11-acre redevelopment site for a planned hotel and condominiums in downtown Scottsdale was sold last week at a trustee sale for $30 million.

AZ-Waters Edge LLC submitted the only bid and will take title of the land northeast of Scottsdale and Camelback roads, said attorney Lawrence Petrowski of Stinson Morrison Hecker LLP, the trustee.

Scottsdale Canal Development LLC, which started assembling the property along the Arizona Canal in 2006, had planned a 240-room Solis Scottsdale hotel and 140 condos on a site that now includes a SRP substation.


"It's a huge disappointment," said Mark Madkour, Scottsdale Canal Development principal. "It was a huge amount of effort, time and money."

Madkour and his investors lost millions of dollars on what was to be a $600 million project.

IMH Financial Corp. of Scottsdale foreclosed on the property in May 2011. AZ-Waters Edge is affiliated with IMH Financial.

Scottsdale Canal Development also lost ownership of a site at 68th Street and Indian School Road it had intended to use for the relocated Salt River Project substation, Madkour said. It paid $7 million for the property.

Westcor gets new deadline

Westcor has again deferred its lease payment until May 31 for 112 acres of state trust land northeast of Scottsdale Road and Loop 101.

The Valley mall developer owed the Arizona State Land Department $2.2 million by April 30 for the site, which has long been planned for a regional mall.

Westcor made $1.26 million in lease payments through 2010 but deferred its payments in January and December 2011. In April 2008, Westcor bid $32 million for the site to secure a 99-year lease.

State Land Commissioner Maria Baier has the discretion to defer lease payments for up to five years.

by Peter Corbett - May. 4, 2012 03:10 PM The Republic | azcentral.com




Solis site goes for $30 million

Proposed Solis property slated for trustee sale

The proposed Solis project (formerly Waterview) on Camelback Road east of Scottsdale Road.



A vacant downtown Scottsdale property that was cleared for a luxury hotel and condominiums is scheduled for a trustee sale next week.

A development group headed by Mark Madkour of Scottsdale Canal Development had plans to build the 240-room Solis Scottsdale hotel and 140 condominiums on the 10.57-acre property.

But the lender foreclosed on the property and Scottsdale Canal Development filed for Chapter 11 bankruptcy last fall.

The site northeast of Scottsdale and Camelback roads and east of the Arizona Canal has been vacant for nearly three years. Madkour's group tore down aging apartments along 73rd Street to prepare the property for development.

Madkour said Scottsdale Canal Development might bid at the trustee sale.

"We still feel we are the best one to move forward with this project," he said. "There's been interest in the northern portion for multifamily development but that doesn't help the situation."

Scottsdale Canal Development had an ambitious $600 million project pegged for the site with a 72-foot hotel, underground parking, six condo buildings, walking paths and two bridges over the canal. The company also planned to move a Salt River Project electrical substation from the site to a spot northeast of 68th Street and Indian School Road.

Most of the opposition centered on relocation of the substation.

Vacant site an eyesore

Tony Viti, who lives north of the site in Villa Monterey Unit 1, said he hopes the property gets developed but he is not sure he will ever see it.

"It doesn't look good," he said. "It's just sitting there with some graffiti on the fences."

Still, the vacant property is an improvement over the apartments that had been on the site, said Viti, who is vice president of the Villa Monterey Unit 1 homeowners association.

"We had all kinds of people walking through our neighborhood," Viti said. "We had guys sleeping back by the canal."

Investors hesitant to buy in

Scottsdale Canal Development defaulted on a series of loans for the project.

Boulder Capital is owed more than $12 million, according to U.S. Bankruptcy Court records.

Madkour said he is trying to line up other investors for the project.

"We have three strong candidates that could come in and help us with a joint venture," he said.

"It's been extremely challenging," Madkour said. "We didn't walk away because we really believe in the project...I firmly believe in the location."

Madkour said he has been trying to lure investors over the past two years but they are hesitant.

"Arizona is just so tarnished by this imploded real-estate market," he said. "It really is on a black list for some people."

by Peter Corbett - Apr. 19, 2012 12:29 PM The Republic | azcentral.com



Proposed Solis property slated for trustee sale

Recession took toll on potential Scottsdale developments

Image of the proposed Solis project (formerly Waterview) on Camelback Road east of Scottsdale Road.

Development brochures for some of Scottsdale's most ambitious projects from a few years ago show pretty pictures of lushly landscaped shopping plazas with fountains and a mix of shops, condos and offices in opulent settings.

Those computer-enhanced images are yellowing now. Some of the Northeast Valley projects have stalled and the optimism and free-flowing investment cash of the era before 2008 seem like a mirage.

Unearthing the publicity pamphlets recently, while cleaning my desk, took me down a memory lane of hope and hype.


Nordstrom, Bloomingdale's and Macy's were touted to open at CityNorth by 2011.

Westcor promoted plans for 190-foot condos and a shopping center with a retractable roof at Palisene northwest of Loop 101 and Scottsdale Road.

Across the road to the east, DMB Associates heralded designs for its One Scottsdale project with 1,100 residential units, 400 hotel rooms and 1.8 million square feet of shopping, dining and office space.

Henkel AG did open its North American headquarters on DMB's 120-acre site in 2008, but One Scottsdale's other buildings have not made it off the drawing board.

Scottsdale Canal Development spent tens of millions of dollars buying and rezoning land for its Solis Scottsdale Resort and Residences northeast of Scottsdale and Camelback roads. It bulldozed aging apartments.

Developers paid for an economic study that projected Solis Scottsdale would generate $3.7 million in city tax revenue in its fourth year.

Four years after the plans surfaced, the Scottsdale Canal Development property is up for bid today in a foreclosure sale.

Bad timing

Timing is everything in music, comedy and development. And these projects got caught on the downbeat of the development cycle that followed a crippling recession and still recovering financial markets.

Projects around the Valley are trying to rebound from bad timing, bad plans or both. That includes the former Centerpoint condo towers in Tempe, Elevation Chandler and CityNorth, three projects that are among the biggest belly flops.

CityNorth, which opened in November 2008, just months after the economic crisis hit, was sold at a foreclosure sale in July 2010. The three anchor department stores and scores of smaller shops and restaurants have pulled out.

Westcor is pursuing development of a luxury outlet mall at Scottsdale Road and Loop 101 that would open early in 2013. The company is not saying if it would be built at Palisene on the Phoenix side of Scottsdale Road or at One Scottsdale to the east.

Westcor and DMB in March 2008 agreed that Westcor would develop the retail at One Scottsdale.

Charley Freericks, DMB general manager of commercial real estate, said One Scottsdale would welcome the Fashion Outlets of Scottsdale, but Westcor has not disclosed its intended location for the project.

In the meantime, other interests are "kicking the tires" at One Scottsdale and the company is feeling optimistic about landing some deals, he said.

One Scottsdale has been on hold for the past few years, but it's in a better position than CityNorth, Freericks said.

"We're starting with a clean slate as the economy comes back to life," he said.

Apartments lead recovery

Paul Katsenes, Scottsdale community and economic development director, said retail development at Scottsdale Road and Loop 101 "would be taking an enormous beating right now" if it had gone forward a few years ago.

Scottsdale Quarter, about 2 miles away, has done really well under the circumstances, he said.

"There is a unique character about retail that it's the last real-estate component to come out of a bad economy," said Katsenes, adding that apartments are the first to emerge.

Indeed, apartment projects are so hot right now that it should suggest some caution to avoid overdevelopment.

As the market recovers, it's good to keep some perspective and remember all those pretty pictures from five years ago.

MORE ON THIS TOPIC

Recession's victims

Here are some of the higher-profile development projects in the Northeast Valley that stalled or were derailed by the recession:

• CityNorth, the mixed-use project at 56th Street and Loop 101.

• Palisene, Westcor's planned regional mall northwest of Scottsdale Road and Loop 101.

• One Scottsdale, DMB Associates' mixed-use project northeast of Scottsdale Road and Loop 101.

• Solis Scottsdale, hotel and luxury condominiums northeast of Scottsdale and Camelback roads.

• Portales Place, a former Grace Communities condo project at Goldwater Boulevard and Highland Avenue.

by Peter Corbett The Arizona Republic Sept. 2, 2011 06:33 AM

Recession took toll on potential Scottsdale developments

Trustee sale of land threatens Solis project

A developer of a planned $600 million downtown hotel and condominiums is facing foreclosure on a canal-bank property northeast of Scottsdale and Camelback roads.

A trustee sale set for Aug. 31 threatens to derail the Solis Scottsdale project, which was to include a 72-foot hotel and 140 condos on an 11-acre site north of the W Scottsdale Hotel.

Mark Madkour, principal of Scottsdale Canal Development LLC, said he has been working for about a year to renegotiate the loan. The original balance of the loan was $45 million.

"I'm feeling very confident we can work something out," he said. "But the timing of this is not good for us."

Scottsdale Canal Development, which started assembling the property in 2006, has faced a number of financial and political hurdles in building the 240-room luxury hotel and condos.

Objections surfaced over the project's height and density, and residents fought plans to move a Salt River Project electrical substation from the site to 68th Street and Indian School Road.

The economy tanked as Scottsdale Canal Development was getting city approval for Solis Scottsdale and the project has been stalled for nearly 2½ years.

"I understand the skepticism" about the development, Madkour said. "It's a very tough environment."

Utility yard relocation delayed

Madkour had said he hoped to start work by last September on relocating the utility yard, but it has not yet occurred.

SRP spokesman Jeff Lane said the utility has extended the land-swap agreement twice this year with the deal now set to expire Aug. 1.

If it can avoid foreclosure, Scottsdale Canal Development is reconsidering its plans for Solis Scottsdale's residential component. The company might build fractional ownership condos at $300,000 for a one-eighth share rather than trying to sell single-owner units in the current market, Madkour said.

Scottsdale Canal Development tore down a number of apartments along 73rd Street to clear the site for the hotel and condos. It also cleared the site at 68th Street and Indian School for the substation.

Helen Cooner, who lives near the Solis Scottsdale site, said the developer has done a good job of maintaining the property over the past few years. She initially objected to the project because the substation was going to be moved across from her house.

Solis Scottsdale is east of the Safari Drive condos and the recently approved Blue Sky apartment project.

Lender forecloses on property

The May 25 foreclosure filing on Scottsdale Canal Development lists the IMH Special Asset NT 179 LLC as the beneficiary for the loan, according to records provided by Ion Data, a Mesa firm that tracks real-estate transactions. The limited-liability company is affiliated with IMH Financial Corp. of Scottsdale.

Attorney Lawrence Petrowski of Stinson Morrison Hecker LLP is the trustee for the Scottsdale Canal Development property.

Madkour remains optimistic about Solis Scottsdale, but he has taken some hits in the commercial real-estate collapse.

Two years ago, Wells Fargo Foothill LLC sued Madkour and other principals in Maricopa County Superior Court over the balance of a $15 million loan that funded investments in apartments, condo conversions, land and office properties.

A receiver sold the real-estate assets to repay the $6 million loan balance. The lawsuit was settled late last year.

by Peter Corbett The Arizona Republic Jun. 17, 2011 09:39 AM



Trustee sale of land threatens Solis project