Crown Realty, also involved in the development of the InterContinental Montelucia Resort & Spa, is trying to negotiate a plan to avoid foreclosure and move forward with plans to redevelop the long-shuttered property in Paradise Valley, Ariz. that would include new golf facilities. But a trustee’s sale for the resort has been set for July 26.
The owner of the Mountain Shadows resort in Paradise Valley has defaulted on his loan but says the long-shuttered property’s redevelopment will move forward, the Arizona Republic reports.
A trustee’s sale for the resort has been set for July 26.
However, officials with California-based Crown Realty and Development Inc., say that the firm wants to avoid the foreclosure, and is negotiating with lender U.S. Bank Special Assets Group on a resolution.
Crown Realty, owned by Robert Flaxman, also developed the InterContinental Montelucia Resort & Spa in Paradise Valley, which defaulted on a $180 million loan about three years ago.
Flaxman owes at least $360,000 in taxes on the Mountain Shadows property, according to the Maricopa County Treasurer’s Office.
Jason Rose, a spokesman for Crown Realty, said if the negotations are successful, there will be no sale. If they are not, Crown can bid on the property at the auction.
“They are optimistic about a resolution,” Rose said. “They feel confident in a favorable resolution with the bank that will translate into a favorable re-development of Mountain Shadows for the town.”
Dozens of residents showed up for a preliminary presentation of Crown Realty’s plans for re-developing the resort, at a Paradise Valley town council meeting in May.
The plan includes resort hotel, residential, golf and retail facilities.
At the meeting, Flaxman, said his firm plans to work through the loan default.
He bought the 68-acre property from Host Marriott Corp. for $42 million, in January 2007. Host Marriott Corp. is now known as Host Hotels & Resorts.
“We are committed to this project and plan to see it through,” Flaxman said.
Town Manager Jim Bacon said Crown Realty has had an application on file with Paradise Valley for several years.
The firm plans to submit a revised application this week.
“The owner has the right to move forward with an application,” Bacon said, whether the property is in default or not.
The Mountain Shadows resort, which remains, has drawn potential re-development possibilities in recent months.
Residents became hopeful when Phoenix-based JDM Partners, co-owned by sports mogul Jerry Colangelo, entered into a purchase agreement for Mountain Shadows in December.
JDM’s projects include Chase Field, US Airways Center, Comerica Theatre and the remodel of the Wigwam resort in Litchfield Park, which represented the company’s first foray into the hospitality industry.
However, the firm announced last month that it was unable to reach a final agreement with Crown Realty and is no longer under contract for the property.
JDM officials provided no more information, citing a confidentiality provision in the purchase agreement.