A number of legal and logistical hurdles are complicating the completion and the sale of the One Camelback development at Central Avenue and Camelback Road in Phoenix.
The project is one of the few large-scale office-to-apartment projects in Arizona, and construction has been a prominent fixture since it was announced in 2019. The project plans to convert the 215KSF BMO Harris office tower into 163 high-end apartments.
In June, developer Camelback Owner LLC defaulted on its loan from lender Delphi Financial Group. Delphi is owed more than $68M. Maricopa County Superior Court Judge Scott McCoy appointed Mike Wilson of Wilson Property Services as a receiver in the matter.
Delphi filed a notice of trustee’s sale, and an auction has been set for Nov. 21 at 10 a.m. Delphi wants to keep the date, while Wilson wants to extend the sales process and is interviewing potential listing agents. Wilson filed a marketing plan that showed an extended sales process that would identify possible buyers and close on the property.
Given the current state of the market and the fact that One Camelback’s construction is only 85% completed and currently on hold, the sales process would almost certainly be long and complicated.
Further complicating matters is the existence of several mechanic’s liens and lien foreclosure actions filed against the project. Three contractors have filed a motion that their liens be consolidated into the receivership case to ensure their claims have priority for repayment when the development is sold. There are reportedly another 12 mechanic’s liens totaling nearly $1.5M that have been filed.
Wilson has asked at that Nov. 21 sale be delayed.
Delphi has filed a notice saying it has no plans to cancel the auction and has said no agents have been retained and no specific plans have been proposed. It wants to go ahead with the sale on Nov. 21 as planned. Delphi claims that the longer the property sits with no further construction, the more its value diminishes.
The matter was referred to Commercial Court Oct. 18. As of Oct. 30, no decision has been announced. (Source)
