An affiliate of Crown Realty & Development, which owns the now-defunct Mountain Shadows Golf Resort, has entered into federal bankruptcy proceedings, according to a July 20 written statement.
The property is up for an estate sale July 26, court records show.
Up until this point Crown Realty & Development has been working toward the creation of a special-use permit -- to be issued by Paradise Valley Town Council -- for the redevelopment of the property at about 56th Street and Lincoln Drive in Paradise Valley.
A special use is primarily "non-residential land use deemed to be generally compatible with the residential character of the Town of Paradise Valley," according to article 11 of the Paradise Valley Town Code.
Rick Carpinelli, Crown Realty SVP for acquisitions & development, said his company is preparing to move forward following provisions set forth in a development agreement that provides up to 584, two-story units, including the existing golf course.
Prior to being shuttered, Mountain Shadows included 337 hotel rooms, convention space and restaurants.
Crown Realty officials contend the underlying issue of the proposed redevelopment of the property hinges on two documents: A 1992 development agreement and a 1962 declaration of restrictions placed on attached residential property.
The relevance of the development document, Crown Realty officials say, is that, among other things, more density would be allowed because of the tenets of the lot coverage defined compared to floor area ratios proposed by town officials for the revitalization project.
The ratio of floor area is how much and how many structures are allowed on the developable land of a project, town officials say.
According to the development agreement, a housing unit could be on as little as 5,000-square feet, which would theoretically allow a little more than 580 housing units to be built on the developable area, which includes the established golf course.
Concerns raised by residents of Mountain Shadows, both east and west, revolve around what may happen to their beloved executive-level golf course while town officials are cognizant of both density levels and building heights.
They say an agreement was made stating the existing land will always be a golf course.
But a 1962 declaration of restrictions says otherwise.
Within the document it does state the course will remain a golf course until Dec. 31, 1987, but beyond that timeframe Crown Realty officials contend they have a legal right to do with it what they want.
"For years we have tried to resolve matters with the town, the neighbors and the bank. Now, it's time to bring these matters to a head," Mr. Carpinelli said in a July 20 press release. "We will look to the courts to provide finality and resolution so at long last we can redevelop Mountain Shadows into a productive and beautiful property once again."
Mr. Carpinelli says Crown officials want to continue to work with the lending institution, Paradise Valley Town Council, planning commission, staff and Mountain Shadows homeowners to create a project that is aesthetically pleasing and that makes financial sense.
"We appreciate the neighbor's efforts and the town's efforts over the years to review the various applications for the redevelopment of this property and the efforts they have made to create new procedures to help get certainty of entitlements for this process," he pointed out. "Unfortunately, the underlying issues of the Development Agreement and golf course rights continue to hinder this process. Now that we have been forced to enter bankruptcy, these outstanding issues have to be decided."
Paradise Valley Mayor Scott Lemarr says the Town of Paradise Valley may retain outside legal counsel.
"They can say what they want to," he said in a July 20 phone interview. "Believe me, U.S. Bank is going to have their lawyers there too. They can make it sound cut and dry, but it is a lot more than cut and dry."
Mayor LeMarr says Crown is sending "mixed signals."
"We are a long way of having the last chapter written on Mountain Shadows," he said. "I am disappointed, but not surprised by their actions."
Typically, when lawyers get involved productive talks between interested parties break down, Mayor LeMarr contends.
"At some point in time when everyone has to lawyer-up the talks stop," he explained.