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Gray Development Wins CityNorth and Desert Ridge

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By Michael Clancy for The Arizona Republic

Photo Credit: Phx Real Estate BlogBlog

As a result of a long, detailed lawsuit, Gray Development Group of Phoenix has won control of the undeveloped 140 acres of CityNorth and with it, master developer responsibilities at Desert Ridge.

Desert Ridge is a 5,700-acre master-planned development centered at Tatum Boulevard and Loop 101. CityNorth, located on the northwest corner of 56th Street and Loop 101, is planned as a large, multiple-use development with upscale shopping, homes and hotels. (The master developer control was held by partnership of Northeast Phoenix Partners [NPP] and the Klutznick Co., the original developers of CityNorth.)

Gray, a developer of upscale apartments in the Valley, had purchased land north of Desert Ridge Marketplace in 2004, and it later won zoning variances for the property that enabled it to add density to the project.

NPP, which enforced the covenants, conditions and restrictions for the entire Desert Ridge area, challenged the variances and lost. In the process, Gray countersued, arguing that NPP and the Klutznick Co. interfered with its efforts to develop the land. Gray eventually defaulted on the property, and it remains vacant. Gray won a $110.7 million jury verdict in the case in 2010.

NPP, unable to pay the verdict, entered into mediated negotiations with Gray, which accepted the land and master developer rights in a settlement. That activity took place over the past month, and the deal was recently closed.

It is unknown now what Gray will do with the property. Company president Bruce Gray was unavailable for comment.

Read more at AZCentral

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