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Ritz-Carlton Paradise Valley developer files for bankruptcy

Developers of the Ritz-Carlton resort in Paradise Valley have filed for bankruptcy.

Five Star Development says the filing is intended to create a clear, court-supervised path toward completing Ritz-Carlton Paradise Valley, The Palmeraie — a 122-acre master-planned resort, residential, and luxury retail project located at 7000 E Lincoln Dr.

Five Star and its lender New York-based Madison Realty Capital have been squabbling for months now. In May, Madison filed a notice of trustee’s sale, signaling foreclosure of the property. The next month, Five Star filed a lawsuit against Madison claiming the lender undermined and took over “the very project it agreed to finance.”

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resorts

Ritz-Carlton Paradise Valley developer files for bankruptcy

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Developers of the Ritz-Carlton resort in Paradise Valley have filed for bankruptcy.

Five Star Development says the filing is intended to create a clear, court-supervised path toward completing Ritz-Carlton Paradise Valley, The Palmeraie — a 122-acre master-planned resort, residential, and luxury retail project located at 7000 E Lincoln Dr.

Five Star and its lender New York-based Madison Realty Capital have been squabbling for months now. In May, Madison filed a notice of trustee’s sale, signaling foreclosure of the property. The next month, Five Star filed a lawsuit against Madison claiming the lender undermined and took over “the very project it agreed to finance.”

Filing for bankruptcy halts foreclosure proceedings, and Five Star says it will preserve control over the project and strengthen protection for stakeholders as it advances toward a full construction restart and completion of the resort.

“This process provides the structure and transparency needed to bring the resort to completion and preserve the integrity of one of the most important developments in Arizona,” said Gerald C. Ayoub, founder and principal of Five Star Development.

Plans for The Palmeraie include a 215-room Ritz-Carlton resort, 80 branded villas, 32 estate Homes, and a 29-acre luxury retail and dining district.

Developments for the property have been nearly 20 years in the making, with construction beginning about seven years ago, but it has been beset by numerous issues, including the halt of the project’s hotel component.

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