Saturday, February 12, 2011

Gray defaults on state land

Gray Development Group is in default on land it bought in the Desert Ridge area in 2004.

Vanessa Hickman, deputy commissioner of the Arizona State Land Department, said a default notice was sent in December for the 32-acre parcel on the northeastern corner of 56th Street and Loop 101.

The default is the second for the Gray group and at least the sixth in the Desert Ridge area.

The Gray parcel sold in May 2004 for more than $1 million per acre, making it one of the most expensive parcels the State Land Department ever sold.

The department originally owned all land in the 5,700-acre master-planned development.

Since 1993, it has been rolling parcels out for auction and subsequent development.

But the recession has had a serious effect on land values - driving those who acquired land at the height of the market into default - and the department's ability to sell parcels.

Under the rules of state land sales, developers are on a seven-year payment schedule.

When payments are missed, default notices go out.

The notices trigger a 60-day period that gives developers time to make good on their deals.

If they fail, the land reverts to the Land Department.

Hickman said the state has not reclaimed the Gray parcel yet.

Gray was scheduled to go before the Phoenix Planning Commission on Wednesday to amend the Desert Ridge Specific Plan as it pertains to the parcel. But that effort was withdrawn earlier that day.

Gray's previous default was on a 41-acre parcel north of Desert Ridge Marketplace. The company last year won a lawsuit claiming the master developer of Desert Ridge, Northeast Phoenix Partners, hindered its efforts to develop the parcel.

by Michael Clancy The Arizona Republic Feb. 12, 2011 12:00 AM

Gray defaults on state land

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