Plan for luxury homes at resort stirs controversy

The owner of the shuttered Mountain Shadows resort in Paradise Valley has filed building-permit applications for two luxury homes on the resort's 18-hole golf course -- something nearby residents have strongly opposed.

In doing so, the owner is invoking a 20-year-old agreement the town made with previous owners of the resort.

Town officials and nearby residents say a move to build homes on the golf course flies in the face of current plans to redevelop the resort property.

On July 20, the same day the building permits were filed, affiliates of Crown Realty & Development, which owns the resort, filed for bankruptcy.

Crown has been working through the town's special-use-permit process to redevelop the property at 56th Street and Lincoln Drive that once was a premier Paradise Valley resort. It closed in 2004.

The proposed special-use permit is being reviewed by the Planning Commission over the course of several meetings. It does not include homes to be built on the golf course.

In 1992, the town entered a development agreement with former resort owner Marriott Corp., to facilitate annexation of the resort.

While the redevelopment of the long-shuttered resort is being guided by the proposed special-use permit, Crown officials say the 1992 development agreement allows for a much higher density than the current proposed plan and does not protect the golf course from development.

Douglas Jorden, Crown's legal representative, said the firm has offered suggestions for more density, including three-story building heights, as a viable alternative to developing the golf course. Residents have opposed greater density.

"It's our view that the development agreement gives us certain rights," Jorden said. "We believe it gives us the right to develop a property that is more intense and dense than what we are currently proposing."

Officials with Crown say they are going down two paths at once - getting a special use permit approval with the current process, or, if that proves unsuccessful, moving forward with stipulations in the 1992 development agreement, which allows for more density.

Members of the Mountain Shadows Resort Committee, who live in private residences on the resort site, have strongly opposed current development proposals by Crown.

Herschell Parent and other members of the committee declined to comment on the latest move.

"I feel it's premature to comment without getting all entities together," Parent said.

Councilman Vernon Parker, a resident of nearby Mountain Shadows Estates East, said he would not be directly affected by the homes, which would be on the west end of the property, but he was critical of the proposed change.

"Quite frankly, I'm dismayed about what has happened," Parker said. "You can't come to council with a certain set of plans for a resort and then make a 180-degree turn."

Officials with Crown say the development agreement already provides for such uses, including as many as 584 residential units on the property, about 245 more than the proposed special-use permit calls for.

Two affiliates of Crown Realty & Development -- MTS Land, LLC and MTS Golf, LLC -- filed for Chapter 11 bankruptcy in federal court last Friday.

The resort was in foreclosure and faced a trustee sale Thursday.

Crown Realty, owned by Robert Flaxman, bought Mountain Shadows for $42 million in January 2007. The property went into default on a $32 million loan in April, according to Ion Data, a Mesa-based real-estate analysis company.

Flaxman also developed the Montelucia Resort and Spa in Paradise Valley, which defaulted on a $180 million loan about three years ago.

Jorden said the Mountain Shadows bankruptcy filing puts an automatic stay on the trustee sale and will not affect development of the resort.

"The current owner had no choice but to seek the protection of federal bankruptcy laws to enable the restructuring of its debt and to proceed with development of the property," Jorden said.

by Philip Haldiman - Jul. 27, 2012 The Republic | azcentral.com



Plan for luxury homes at resort stirs controversy