Tuesday, June 28, 2011

Home prices up first time in 8 months

WASHINGTON - Home prices in major U.S. cities have risen for the first time in eight months, boosted by an annual flurry of spring buyers.

The Standard & Poor's/Case-Shiller home-price index reported Tuesday that prices rose in 13 of the 20 cities tracked. Washington, D.C., saw the biggest price increases, followed by San Francisco, Atlanta and Seattle.

Still, six metro areas are at their lowest levels in the nearly four years. Those markets are: Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa.

Last month, home prices in big metro areas sunk to their lowest since 2002. Since the bubble burst in 2006, prices have fallen more than they did during the Great Depression.

The index, which covers metro areas that include about 50 percent of U.S. households, rose 0.7 percent, the first increase since July. The index measures sales of select homes in those cities compared with prices in January 2000 and provides a three-month average price. The April data is the latest available.

David M. Blitzer, chairman of Standard & Poor's index committee, cautioned that while the price index increase was a "welcome shift from recent months," much of the improvement was likely because of the beginning of the traditionally busy spring and summer home-buying seasons.

A delay in processing foreclosures is also a factor. Homes in foreclosure sell at a 20 percent discount on average, which can hurt prices in neighborhoods. But many foreclosures have been delayed while federal regulators, state attorneys general and banks review how those foreclosures were carried out over the past two years.

Even with the increase, housing remains the weakest part of the U.S. economy.

Sales of previously occupied homes sank in May to a seasonally adjusted annual rate of 4.81 million. That's far below the roughly 6 million sold in healthy housing markets. Since the housing boom went bust in 2006, sales have fallen in four of the past five years.

New-home sales haven't fared any better. They fell in May to a seasonally adjusted annual rate of 319,000 - fewer than half the 700,000 that economists say must be sold to sustain a healthy housing market. Sales of new homes have fallen 18 percent in the two years since the recession ended. Last year was the worst for new-home sales on records dating back half a century.

Larger down payment requirements, tougher lending standards and high unemployment are preventing people from buying homes. Many people who can afford to buy are holding off, worried that prices have yet to bottom out.

The depressed housing market has weighed on the broader economy. Declining home prices have kept people from selling their houses and moving to find jobs in growing areas. They have also made people feel less wealthy. That has reduced consumer spending, which drives about 70 percent of economic activity.

by Associated Press June 28, 2011




Home prices up first time in 8 months

Home prices up first time in 8 months

WASHINGTON - Home prices in major U.S. cities have risen for the first time in eight months, boosted by an annual flurry of spring buyers.

The Standard & Poor's/Case-Shiller home-price index reported Tuesday that prices rose in 13 of the 20 cities tracked. Washington, D.C., saw the biggest price increases, followed by San Francisco, Atlanta and Seattle.

Still, six metro areas are at their lowest levels in the nearly four years. Those markets are: Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa.

Last month, home prices in big metro areas sunk to their lowest since 2002. Since the bubble burst in 2006, prices have fallen more than they did during the Great Depression.

The index, which covers metro areas that include about 50 percent of U.S. households, rose 0.7 percent, the first increase since July. The index measures sales of select homes in those cities compared with prices in January 2000 and provides a three-month average price. The April data is the latest available.

David M. Blitzer, chairman of Standard & Poor's index committee, cautioned that while the price index increase was a "welcome shift from recent months," much of the improvement was likely because of the beginning of the traditionally busy spring and summer home-buying seasons.

A delay in processing foreclosures is also a factor. Homes in foreclosure sell at a 20 percent discount on average, which can hurt prices in neighborhoods. But many foreclosures have been delayed while federal regulators, state attorneys general and banks review how those foreclosures were carried out over the past two years.

Even with the increase, housing remains the weakest part of the U.S. economy.

Sales of previously occupied homes sank in May to a seasonally adjusted annual rate of 4.81 million. That's far below the roughly 6 million sold in healthy housing markets. Since the housing boom went bust in 2006, sales have fallen in four of the past five years.

New-home sales haven't fared any better. They fell in May to a seasonally adjusted annual rate of 319,000 - fewer than half the 700,000 that economists say must be sold to sustain a healthy housing market. Sales of new homes have fallen 18 percent in the two years since the recession ended. Last year was the worst for new-home sales on records dating back half a century.

Larger down payment requirements, tougher lending standards and high unemployment are preventing people from buying homes. Many people who can afford to buy are holding off, worried that prices have yet to bottom out.

The depressed housing market has weighed on the broader economy. Declining home prices have kept people from selling their houses and moving to find jobs in growing areas. They have also made people feel less wealthy. That has reduced consumer spending, which drives about 70 percent of economic activity.

by Associated Press June 28, 2011



Home prices up first time in 8 months

Home prices up first time in 8 months

WASHINGTON - Home prices in major U.S. cities have risen for the first time in eight months, boosted by an annual flurry of spring buyers.

The Standard & Poor's/Case-Shiller home-price index reported Tuesday that prices rose in 13 of the 20 cities tracked. Washington, D.C., saw the biggest price increases, followed by San Francisco, Atlanta and Seattle.

Still, six metro areas are at their lowest levels in the nearly four years. Those markets are: Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa.

Last month, home prices in big metro areas sunk to their lowest since 2002. Since the bubble burst in 2006, prices have fallen more than they did during the Great Depression.

The index, which covers metro areas that include about 50 percent of U.S. households, rose 0.7 percent, the first increase since July. The index measures sales of select homes in those cities compared with prices in January 2000 and provides a three-month average price. The April data is the latest available.

David M. Blitzer, chairman of Standard & Poor's index committee, cautioned that while the price index increase was a "welcome shift from recent months," much of the improvement was likely because of the beginning of the traditionally busy spring and summer home-buying seasons.

A delay in processing foreclosures is also a factor. Homes in foreclosure sell at a 20 percent discount on average, which can hurt prices in neighborhoods. But many foreclosures have been delayed while federal regulators, state attorneys general and banks review how those foreclosures were carried out over the past two years.

Even with the increase, housing remains the weakest part of the U.S. economy.

Sales of previously occupied homes sank in May to a seasonally adjusted annual rate of 4.81 million. That's far below the roughly 6 million sold in healthy housing markets. Since the housing boom went bust in 2006, sales have fallen in four of the past five years.

New-home sales haven't fared any better. They fell in May to a seasonally adjusted annual rate of 319,000 - fewer than half the 700,000 that economists say must be sold to sustain a healthy housing market. Sales of new homes have fallen 18 percent in the two years since the recession ended. Last year was the worst for new-home sales on records dating back half a century.

Larger down payment requirements, tougher lending standards and high unemployment are preventing people from buying homes. Many people who can afford to buy are holding off, worried that prices have yet to bottom out.

The depressed housing market has weighed on the broader economy. Declining home prices have kept people from selling their houses and moving to find jobs in growing areas. They have also made people feel less wealthy. That has reduced consumer spending, which drives about 70 percent of economic activity.

by Associated Press June 28, 2011



Home prices up first time in 8 months

Home prices up first time in 8 months

WASHINGTON - Home prices in major U.S. cities have risen for the first time in eight months, boosted by an annual flurry of spring buyers.

The Standard & Poor's/Case-Shiller home-price index reported Tuesday that prices rose in 13 of the 20 cities tracked. Washington, D.C., saw the biggest price increases, followed by San Francisco, Atlanta and Seattle.

Still, six metro areas are at their lowest levels in the nearly four years. Those markets are: Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa.

Last month, home prices in big metro areas sunk to their lowest since 2002. Since the bubble burst in 2006, prices have fallen more than they did during the Great Depression.

The index, which covers metro areas that include about 50 percent of U.S. households, rose 0.7 percent, the first increase since July. The index measures sales of select homes in those cities compared with prices in January 2000 and provides a three-month average price. The April data is the latest available.

David M. Blitzer, chairman of Standard & Poor's index committee, cautioned that while the price index increase was a "welcome shift from recent months," much of the improvement was likely because of the beginning of the traditionally busy spring and summer home-buying seasons.

A delay in processing foreclosures is also a factor. Homes in foreclosure sell at a 20 percent discount on average, which can hurt prices in neighborhoods. But many foreclosures have been delayed while federal regulators, state attorneys general and banks review how those foreclosures were carried out over the past two years.

Even with the increase, housing remains the weakest part of the U.S. economy.

Sales of previously occupied homes sank in May to a seasonally adjusted annual rate of 4.81 million. That's far below the roughly 6 million sold in healthy housing markets. Since the housing boom went bust in 2006, sales have fallen in four of the past five years.

New-home sales haven't fared any better. They fell in May to a seasonally adjusted annual rate of 319,000 - fewer than half the 700,000 that economists say must be sold to sustain a healthy housing market. Sales of new homes have fallen 18 percent in the two years since the recession ended. Last year was the worst for new-home sales on records dating back half a century.

Larger down payment requirements, tougher lending standards and high unemployment are preventing people from buying homes. Many people who can afford to buy are holding off, worried that prices have yet to bottom out.

The depressed housing market has weighed on the broader economy. Declining home prices have kept people from selling their houses and moving to find jobs in growing areas. They have also made people feel less wealthy. That has reduced consumer spending, which drives about 70 percent of economic activity.

by Associated Press June 28, 2011



Home prices up first time in 8 months

Home prices up first time in 8 months

WASHINGTON - Home prices in major U.S. cities have risen for the first time in eight months, boosted by an annual flurry of spring buyers.

The Standard & Poor's/Case-Shiller home-price index reported Tuesday that prices rose in 13 of the 20 cities tracked. Washington, D.C., saw the biggest price increases, followed by San Francisco, Atlanta and Seattle.

Still, six metro areas are at their lowest levels in the nearly four years. Those markets are: Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa.

Last month, home prices in big metro areas sunk to their lowest since 2002. Since the bubble burst in 2006, prices have fallen more than they did during the Great Depression.

The index, which covers metro areas that include about 50 percent of U.S. households, rose 0.7 percent, the first increase since July. The index measures sales of select homes in those cities compared with prices in January 2000 and provides a three-month average price. The April data is the latest available.

David M. Blitzer, chairman of Standard & Poor's index committee, cautioned that while the price index increase was a "welcome shift from recent months," much of the improvement was likely because of the beginning of the traditionally busy spring and summer home-buying seasons.

A delay in processing foreclosures is also a factor. Homes in foreclosure sell at a 20 percent discount on average, which can hurt prices in neighborhoods. But many foreclosures have been delayed while federal regulators, state attorneys general and banks review how those foreclosures were carried out over the past two years.

Even with the increase, housing remains the weakest part of the U.S. economy.

Sales of previously occupied homes sank in May to a seasonally adjusted annual rate of 4.81 million. That's far below the roughly 6 million sold in healthy housing markets. Since the housing boom went bust in 2006, sales have fallen in four of the past five years.

New-home sales haven't fared any better. They fell in May to a seasonally adjusted annual rate of 319,000 - fewer than half the 700,000 that economists say must be sold to sustain a healthy housing market. Sales of new homes have fallen 18 percent in the two years since the recession ended. Last year was the worst for new-home sales on records dating back half a century.

Larger down payment requirements, tougher lending standards and high unemployment are preventing people from buying homes. Many people who can afford to buy are holding off, worried that prices have yet to bottom out.

The depressed housing market has weighed on the broader economy. Declining home prices have kept people from selling their houses and moving to find jobs in growing areas. They have also made people feel less wealthy. That has reduced consumer spending, which drives about 70 percent of economic activity.

by Associated Press June 28, 2011



Home prices up first time in 8 months

Home prices up first time in 8 months

WASHINGTON - Home prices in major U.S. cities have risen for the first time in eight months, boosted by an annual flurry of spring buyers.

The Standard & Poor's/Case-Shiller home-price index reported Tuesday that prices rose in 13 of the 20 cities tracked. Washington, D.C., saw the biggest price increases, followed by San Francisco, Atlanta and Seattle.

Still, six metro areas are at their lowest levels in the nearly four years. Those markets are: Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa.

Last month, home prices in big metro areas sunk to their lowest since 2002. Since the bubble burst in 2006, prices have fallen more than they did during the Great Depression.

The index, which covers metro areas that include about 50 percent of U.S. households, rose 0.7 percent, the first increase since July. The index measures sales of select homes in those cities compared with prices in January 2000 and provides a three-month average price. The April data is the latest available.

David M. Blitzer, chairman of Standard & Poor's index committee, cautioned that while the price index increase was a "welcome shift from recent months," much of the improvement was likely because of the beginning of the traditionally busy spring and summer home-buying seasons.

A delay in processing foreclosures is also a factor. Homes in foreclosure sell at a 20 percent discount on average, which can hurt prices in neighborhoods. But many foreclosures have been delayed while federal regulators, state attorneys general and banks review how those foreclosures were carried out over the past two years.

Even with the increase, housing remains the weakest part of the U.S. economy.

Sales of previously occupied homes sank in May to a seasonally adjusted annual rate of 4.81 million. That's far below the roughly 6 million sold in healthy housing markets. Since the housing boom went bust in 2006, sales have fallen in four of the past five years.

New-home sales haven't fared any better. They fell in May to a seasonally adjusted annual rate of 319,000 - fewer than half the 700,000 that economists say must be sold to sustain a healthy housing market. Sales of new homes have fallen 18 percent in the two years since the recession ended. Last year was the worst for new-home sales on records dating back half a century.

Larger down payment requirements, tougher lending standards and high unemployment are preventing people from buying homes. Many people who can afford to buy are holding off, worried that prices have yet to bottom out.

The depressed housing market has weighed on the broader economy. Declining home prices have kept people from selling their houses and moving to find jobs in growing areas. They have also made people feel less wealthy. That has reduced consumer spending, which drives about 70 percent of economic activity.

by Associated Press June 28, 2011



Home prices up first time in 8 months

Home prices up first time in 8 months

WASHINGTON - Home prices in major U.S. cities have risen for the first time in eight months, boosted by an annual flurry of spring buyers.

The Standard & Poor's/Case-Shiller home-price index reported Tuesday that prices rose in 13 of the 20 cities tracked. Washington, D.C., saw the biggest price increases, followed by San Francisco, Atlanta and Seattle.

Still, six metro areas are at their lowest levels in the nearly four years. Those markets are: Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa.

Last month, home prices in big metro areas sunk to their lowest since 2002. Since the bubble burst in 2006, prices have fallen more than they did during the Great Depression.

The index, which covers metro areas that include about 50 percent of U.S. households, rose 0.7 percent, the first increase since July. The index measures sales of select homes in those cities compared with prices in January 2000 and provides a three-month average price. The April data is the latest available.

David M. Blitzer, chairman of Standard & Poor's index committee, cautioned that while the price index increase was a "welcome shift from recent months," much of the improvement was likely because of the beginning of the traditionally busy spring and summer home-buying seasons.

A delay in processing foreclosures is also a factor. Homes in foreclosure sell at a 20 percent discount on average, which can hurt prices in neighborhoods. But many foreclosures have been delayed while federal regulators, state attorneys general and banks review how those foreclosures were carried out over the past two years.

Even with the increase, housing remains the weakest part of the U.S. economy.

Sales of previously occupied homes sank in May to a seasonally adjusted annual rate of 4.81 million. That's far below the roughly 6 million sold in healthy housing markets. Since the housing boom went bust in 2006, sales have fallen in four of the past five years.

New-home sales haven't fared any better. They fell in May to a seasonally adjusted annual rate of 319,000 - fewer than half the 700,000 that economists say must be sold to sustain a healthy housing market. Sales of new homes have fallen 18 percent in the two years since the recession ended. Last year was the worst for new-home sales on records dating back half a century.

Larger down payment requirements, tougher lending standards and high unemployment are preventing people from buying homes. Many people who can afford to buy are holding off, worried that prices have yet to bottom out.

The depressed housing market has weighed on the broader economy. Declining home prices have kept people from selling their houses and moving to find jobs in growing areas. They have also made people feel less wealthy. That has reduced consumer spending, which drives about 70 percent of economic activity.

by Associated Press June 28, 2011



Home prices up first time in 8 months

Glendale's Westgate City Center changed face of city

Westgate City Center, Glendale, Arizona David Kadlubowski/The Arizona Republic

Westgate City Center, a retail-and-entertainment center with opulent fountains and flashy billboards, opened in Glendale in 2006.


Ten years ago, Steve Ellman surveyed miles of Glendale farm fields in a helicopter and decided this was where he would build a massive sports-and-entertainment district.

The developer had fashioned a career out of envisioning what others doubted.

He promised Glendale officials their sleepy suburb would soon boast a state-of-the-art hockey arena and an urban entertainment zone.

Ellman made his dream a reality. Westgate City Center opened in 2006 with fountains and fanfare.

The Phoenix Coyotes played there, and the Arizona Cardinals moved in next door.

Then, a deep recession pummeled the region.

The fate of the hockey team was in doubt. Still, in February of this year, Ellman told West Valley leaders that a housing shortage could occur in three years.

"Hold onto your property. You will have tremendous profit," he told a Glendale audience as a speaker at Mayor Elaine Scruggs' state-of-the-city speech.

In the background, however, problems lurked.

Even as Ellman uttered those words, lenders were demanding nearly $500 million in unpaid loans used to build Westgate. The money was 2 1/2 years past due.

Last week, Ellman announced that the flagship project of his 39-year career faces foreclosure and will go to auction.

Whether this signals the end of Ellman's control of Westgate isn't yet known.

Selling a vision

The developer first saw the farm fields of his future Westgate in 2001 at Loop 101 and Glendale Avenue.

For three years, he had tried to sell Scottsdale on a plan to revive the faded Los Arcos Mall with new shops and a hockey arena for the Coyotes. Then Glendale came forward.

City leaders wanted Ellman to help push Glendale's economy beyond housing development. They were thrilled by his vision of Times Square-style flashing billboards, restaurants and glass-paned offices.

In a month, Ellman had an initial deal with Glendale, calling for him to build a $180 million arena and commercial center.

Glendale's mayor beamed and pronounced the 2001 vote "historical."

The sports district could attract 10,000 to 15,000 jobs to the Loop 101 corridor by 2012, city official Jim Colson predicted at the time.

Glendale projected that even in a dismal economy, the city could generate enough to pay off its arena and reap an extra $100 million, mostly from sales-tax revenue at Westgate. In a normal economy, that could soar to $475 million.

A city consultant called it "real revenue, not smoke."

Those numbers haven't panned out.

A fraction of the predicted jobs have sprung up thus far in the sports district, and Westgate sales-tax revenue alone has not paid the city's arena debt.

Still Mayor Scruggs points to companies that have moved to Glendale and the city's exposure on national television.

"We have built a solid foundation and created a strong vision," she has said.

Problems arise

Westgate experienced hitches early on.

Ellman changed his deal so that Glendale took out loans for arena construction instead of him. He defaulted on a $7 million loan. He was two years late opening Westgate.

Just months before it opened, he cut ties with the Coyotes, selling the team to Jerry Moyes, a Glendale trucking magnate who had heavily invested in Ellman's dream. Three years later, his former partner declared the team bankrupt.

The Coyotes were the anchor to the dream, pulling fans to Westgate. The city scrambled to save the team.

Ellman, no longer an owner, was not publicly involved. When fans planned a rally to support the Coyotes, Westgate refused to allow the gathering.

Ellman said he supported the city's efforts to find a buyer and didn't consider purchasing the team since other ownership groups were hot in pursuit.

"We did what we could to support these buyers," he said in an e-mail Friday, though he didn't offer specifics.

Ellman cited the two-year struggle to find a team buyer as one reason Westgate is on the road to foreclosure. The real-estate meltdown was the other.

Ellman would not say why he failed to make the balloon payments on several loans. His spokesman confirmed they came due in November 2008. That was before the worst of the recession and the Coyotes' bankruptcy.

An auction for Westgate's buildings, built in part with a $97.5 million loan from iStar Financial, is scheduled Sept. 19, according to Hadden Schifman, a commercial real-estate analyst with Phoenix-based IBIS Report.

Other loans from Credit Suisse for $376 million are in default, he said, and the land around Westgate will go to auction.

Ellman isn't the only developer struggling. Many tracts of land purchased and offices built near Glendale's sports district have gone to auction as some developers opted to let go as values tanked.

Few can dispute Ellman raised Glendale's profile. He landed the city its first professional sports team, the Coyotes, and then set up a white tent in farm fields as he pitched the area to the Cardinals.

He wowed skeptics when Westgate debuted as a colorful complex with Bellagio-like fountains, shops and a movie theater. It has attracted millions to Glendale.

The crowning moment was hosting Super Bowl XLII in 2008.

Westgate itself pumped about $8 million in sales taxes last fiscal year into Glendale's coffers.

Ellman once pointed proudly to a map of sports venues and commercial projects popping up and took credit for starting it all.

"We brought a billion dollars to a freaking cotton field," he said.

Future uncertain

Even if Westgate goes to auction, it isn't likely to shut down.

Lenders may allow foreclosed homes to sit empty and vacant land to grow weeds. But no one wants a commercial complex as large as Westgate with rent-paying tenants to stop bringing in business.

Ellman hopes to remain a part of the development.

"Westgate will always be my favorite project," he said. "Just as Phoenix has 24th and Camelback, Tempe has Mill Avenue and Scottsdale has Old Town, Glendale has Westgate."

The developer told Glendale leaders last week that he hopes to strike a deal before the auction with lenders to keep Westgate. At the least, he believes he could stay on with a new owner as property manager.

Failing that, Ellman will continue to own Westgate's towering billboards. The sign advertising was set up under a different company.

"I don't think he's going to give it up without a fight," Glendale Councilwoman Joyce Clark said. "It is obvious when you talk to him that Westgate is something very near and dear to his heart."

But others could be interested at the right price.

One possibility: a new Coyotes owner could benefit from remarrying the team to the entertainment complex.

Matthew Hulsizer, who was in negotiations to buy the Coyotes, said he would consider purchasing Westgate if he took over the hockey franchise. But on Monday, the National Hockey League confirmed Hulsizer had pulled out of talks with Glendale.

Cardinals President Michael Bidwill, whose team plays next door, has development aspirations, with skyscrapers planned near the football stadium.

"We aren't pursuing Westgate but are obviously following the recent developments," he said Friday.

Whoever owns the Glendale center, a new economic landscape offers scant hope of completing the course charted a decade ago, including $2 million condos that were to be built in a 10-story tower.

"Years from now, our initial vision will still be evident," Ellman said. "Our original plan, with modifications to address a changing market, was sound."

by Rebekah L. Sanders The Arizona Republic Jun. 28, 2011 12:00 AM



Glendale's Westgate City Center changed face of city

Glendale's Westgate City Center changed face of city

Westgate City Center, Glendale, Arizona David Kadlubowski/The Arizona Republic

Westgate City Center, a retail-and-entertainment center with opulent fountains and flashy billboards, opened in Glendale in 2006.


Ten years ago, Steve Ellman surveyed miles of Glendale farm fields in a helicopter and decided this was where he would build a massive sports-and-entertainment district.

The developer had fashioned a career out of envisioning what others doubted.

He promised Glendale officials their sleepy suburb would soon boast a state-of-the-art hockey arena and an urban entertainment zone.

Ellman made his dream a reality. Westgate City Center opened in 2006 with fountains and fanfare.

The Phoenix Coyotes played there, and the Arizona Cardinals moved in next door.

Then, a deep recession pummeled the region.

The fate of the hockey team was in doubt. Still, in February of this year, Ellman told West Valley leaders that a housing shortage could occur in three years.

"Hold onto your property. You will have tremendous profit," he told a Glendale audience as a speaker at Mayor Elaine Scruggs' state-of-the-city speech.

In the background, however, problems lurked.

Even as Ellman uttered those words, lenders were demanding nearly $500 million in unpaid loans used to build Westgate. The money was 2 1/2 years past due.

Last week, Ellman announced that the flagship project of his 39-year career faces foreclosure and will go to auction.

Whether this signals the end of Ellman's control of Westgate isn't yet known.

Selling a vision

The developer first saw the farm fields of his future Westgate in 2001 at Loop 101 and Glendale Avenue.

For three years, he had tried to sell Scottsdale on a plan to revive the faded Los Arcos Mall with new shops and a hockey arena for the Coyotes. Then Glendale came forward.

City leaders wanted Ellman to help push Glendale's economy beyond housing development. They were thrilled by his vision of Times Square-style flashing billboards, restaurants and glass-paned offices.

In a month, Ellman had an initial deal with Glendale, calling for him to build a $180 million arena and commercial center.

Glendale's mayor beamed and pronounced the 2001 vote "historical."

The sports district could attract 10,000 to 15,000 jobs to the Loop 101 corridor by 2012, city official Jim Colson predicted at the time.

Glendale projected that even in a dismal economy, the city could generate enough to pay off its arena and reap an extra $100 million, mostly from sales-tax revenue at Westgate. In a normal economy, that could soar to $475 million.

A city consultant called it "real revenue, not smoke."

Those numbers haven't panned out.

A fraction of the predicted jobs have sprung up thus far in the sports district, and Westgate sales-tax revenue alone has not paid the city's arena debt.

Still Mayor Scruggs points to companies that have moved to Glendale and the city's exposure on national television.

"We have built a solid foundation and created a strong vision," she has said.

Problems arise

Westgate experienced hitches early on.

Ellman changed his deal so that Glendale took out loans for arena construction instead of him. He defaulted on a $7 million loan. He was two years late opening Westgate.

Just months before it opened, he cut ties with the Coyotes, selling the team to Jerry Moyes, a Glendale trucking magnate who had heavily invested in Ellman's dream. Three years later, his former partner declared the team bankrupt.

The Coyotes were the anchor to the dream, pulling fans to Westgate. The city scrambled to save the team.

Ellman, no longer an owner, was not publicly involved. When fans planned a rally to support the Coyotes, Westgate refused to allow the gathering.

Ellman said he supported the city's efforts to find a buyer and didn't consider purchasing the team since other ownership groups were hot in pursuit.

"We did what we could to support these buyers," he said in an e-mail Friday, though he didn't offer specifics.

Ellman cited the two-year struggle to find a team buyer as one reason Westgate is on the road to foreclosure. The real-estate meltdown was the other.

Ellman would not say why he failed to make the balloon payments on several loans. His spokesman confirmed they came due in November 2008. That was before the worst of the recession and the Coyotes' bankruptcy.

An auction for Westgate's buildings, built in part with a $97.5 million loan from iStar Financial, is scheduled Sept. 19, according to Hadden Schifman, a commercial real-estate analyst with Phoenix-based IBIS Report.

Other loans from Credit Suisse for $376 million are in default, he said, and the land around Westgate will go to auction.

Ellman isn't the only developer struggling. Many tracts of land purchased and offices built near Glendale's sports district have gone to auction as some developers opted to let go as values tanked.

Few can dispute Ellman raised Glendale's profile. He landed the city its first professional sports team, the Coyotes, and then set up a white tent in farm fields as he pitched the area to the Cardinals.

He wowed skeptics when Westgate debuted as a colorful complex with Bellagio-like fountains, shops and a movie theater. It has attracted millions to Glendale.

The crowning moment was hosting Super Bowl XLII in 2008.

Westgate itself pumped about $8 million in sales taxes last fiscal year into Glendale's coffers.

Ellman once pointed proudly to a map of sports venues and commercial projects popping up and took credit for starting it all.

"We brought a billion dollars to a freaking cotton field," he said.

Future uncertain

Even if Westgate goes to auction, it isn't likely to shut down.

Lenders may allow foreclosed homes to sit empty and vacant land to grow weeds. But no one wants a commercial complex as large as Westgate with rent-paying tenants to stop bringing in business.

Ellman hopes to remain a part of the development.

"Westgate will always be my favorite project," he said. "Just as Phoenix has 24th and Camelback, Tempe has Mill Avenue and Scottsdale has Old Town, Glendale has Westgate."

The developer told Glendale leaders last week that he hopes to strike a deal before the auction with lenders to keep Westgate. At the least, he believes he could stay on with a new owner as property manager.

Failing that, Ellman will continue to own Westgate's towering billboards. The sign advertising was set up under a different company.

"I don't think he's going to give it up without a fight," Glendale Councilwoman Joyce Clark said. "It is obvious when you talk to him that Westgate is something very near and dear to his heart."

But others could be interested at the right price.

One possibility: a new Coyotes owner could benefit from remarrying the team to the entertainment complex.

Matthew Hulsizer, who was in negotiations to buy the Coyotes, said he would consider purchasing Westgate if he took over the hockey franchise. But on Monday, the National Hockey League confirmed Hulsizer had pulled out of talks with Glendale.

Cardinals President Michael Bidwill, whose team plays next door, has development aspirations, with skyscrapers planned near the football stadium.

"We aren't pursuing Westgate but are obviously following the recent developments," he said Friday.

Whoever owns the Glendale center, a new economic landscape offers scant hope of completing the course charted a decade ago, including $2 million condos that were to be built in a 10-story tower.

"Years from now, our initial vision will still be evident," Ellman said. "Our original plan, with modifications to address a changing market, was sound."

by Rebekah L. Sanders The Arizona Republic Jun. 28, 2011 12:00 AM





Glendale's Westgate City Center changed face of city

Glendale's Westgate City Center changed face of city

Westgate City Center, Glendale, Arizona David Kadlubowski/The Arizona Republic

Westgate City Center, a retail-and-entertainment center with opulent fountains and flashy billboards, opened in Glendale in 2006.


Ten years ago, Steve Ellman surveyed miles of Glendale farm fields in a helicopter and decided this was where he would build a massive sports-and-entertainment district.

The developer had fashioned a career out of envisioning what others doubted.

He promised Glendale officials their sleepy suburb would soon boast a state-of-the-art hockey arena and an urban entertainment zone.

Ellman made his dream a reality. Westgate City Center opened in 2006 with fountains and fanfare.

The Phoenix Coyotes played there, and the Arizona Cardinals moved in next door.

Then, a deep recession pummeled the region.

The fate of the hockey team was in doubt. Still, in February of this year, Ellman told West Valley leaders that a housing shortage could occur in three years.

"Hold onto your property. You will have tremendous profit," he told a Glendale audience as a speaker at Mayor Elaine Scruggs' state-of-the-city speech.

In the background, however, problems lurked.

Even as Ellman uttered those words, lenders were demanding nearly $500 million in unpaid loans used to build Westgate. The money was 2 1/2 years past due.

Last week, Ellman announced that the flagship project of his 39-year career faces foreclosure and will go to auction.

Whether this signals the end of Ellman's control of Westgate isn't yet known.

Selling a vision

The developer first saw the farm fields of his future Westgate in 2001 at Loop 101 and Glendale Avenue.

For three years, he had tried to sell Scottsdale on a plan to revive the faded Los Arcos Mall with new shops and a hockey arena for the Coyotes. Then Glendale came forward.

City leaders wanted Ellman to help push Glendale's economy beyond housing development. They were thrilled by his vision of Times Square-style flashing billboards, restaurants and glass-paned offices.

In a month, Ellman had an initial deal with Glendale, calling for him to build a $180 million arena and commercial center.

Glendale's mayor beamed and pronounced the 2001 vote "historical."

The sports district could attract 10,000 to 15,000 jobs to the Loop 101 corridor by 2012, city official Jim Colson predicted at the time.

Glendale projected that even in a dismal economy, the city could generate enough to pay off its arena and reap an extra $100 million, mostly from sales-tax revenue at Westgate. In a normal economy, that could soar to $475 million.

A city consultant called it "real revenue, not smoke."

Those numbers haven't panned out.

A fraction of the predicted jobs have sprung up thus far in the sports district, and Westgate sales-tax revenue alone has not paid the city's arena debt.

Still Mayor Scruggs points to companies that have moved to Glendale and the city's exposure on national television.

"We have built a solid foundation and created a strong vision," she has said.

Problems arise

Westgate experienced hitches early on.

Ellman changed his deal so that Glendale took out loans for arena construction instead of him. He defaulted on a $7 million loan. He was two years late opening Westgate.

Just months before it opened, he cut ties with the Coyotes, selling the team to Jerry Moyes, a Glendale trucking magnate who had heavily invested in Ellman's dream. Three years later, his former partner declared the team bankrupt.

The Coyotes were the anchor to the dream, pulling fans to Westgate. The city scrambled to save the team.

Ellman, no longer an owner, was not publicly involved. When fans planned a rally to support the Coyotes, Westgate refused to allow the gathering.

Ellman said he supported the city's efforts to find a buyer and didn't consider purchasing the team since other ownership groups were hot in pursuit.

"We did what we could to support these buyers," he said in an e-mail Friday, though he didn't offer specifics.

Ellman cited the two-year struggle to find a team buyer as one reason Westgate is on the road to foreclosure. The real-estate meltdown was the other.

Ellman would not say why he failed to make the balloon payments on several loans. His spokesman confirmed they came due in November 2008. That was before the worst of the recession and the Coyotes' bankruptcy.

An auction for Westgate's buildings, built in part with a $97.5 million loan from iStar Financial, is scheduled Sept. 19, according to Hadden Schifman, a commercial real-estate analyst with Phoenix-based IBIS Report.

Other loans from Credit Suisse for $376 million are in default, he said, and the land around Westgate will go to auction.

Ellman isn't the only developer struggling. Many tracts of land purchased and offices built near Glendale's sports district have gone to auction as some developers opted to let go as values tanked.

Few can dispute Ellman raised Glendale's profile. He landed the city its first professional sports team, the Coyotes, and then set up a white tent in farm fields as he pitched the area to the Cardinals.

He wowed skeptics when Westgate debuted as a colorful complex with Bellagio-like fountains, shops and a movie theater. It has attracted millions to Glendale.

The crowning moment was hosting Super Bowl XLII in 2008.

Westgate itself pumped about $8 million in sales taxes last fiscal year into Glendale's coffers.

Ellman once pointed proudly to a map of sports venues and commercial projects popping up and took credit for starting it all.

"We brought a billion dollars to a freaking cotton field," he said.

Future uncertain

Even if Westgate goes to auction, it isn't likely to shut down.

Lenders may allow foreclosed homes to sit empty and vacant land to grow weeds. But no one wants a commercial complex as large as Westgate with rent-paying tenants to stop bringing in business.

Ellman hopes to remain a part of the development.

"Westgate will always be my favorite project," he said. "Just as Phoenix has 24th and Camelback, Tempe has Mill Avenue and Scottsdale has Old Town, Glendale has Westgate."

The developer told Glendale leaders last week that he hopes to strike a deal before the auction with lenders to keep Westgate. At the least, he believes he could stay on with a new owner as property manager.

Failing that, Ellman will continue to own Westgate's towering billboards. The sign advertising was set up under a different company.

"I don't think he's going to give it up without a fight," Glendale Councilwoman Joyce Clark said. "It is obvious when you talk to him that Westgate is something very near and dear to his heart."

But others could be interested at the right price.

One possibility: a new Coyotes owner could benefit from remarrying the team to the entertainment complex.

Matthew Hulsizer, who was in negotiations to buy the Coyotes, said he would consider purchasing Westgate if he took over the hockey franchise. But on Monday, the National Hockey League confirmed Hulsizer had pulled out of talks with Glendale.

Cardinals President Michael Bidwill, whose team plays next door, has development aspirations, with skyscrapers planned near the football stadium.

"We aren't pursuing Westgate but are obviously following the recent developments," he said Friday.

Whoever owns the Glendale center, a new economic landscape offers scant hope of completing the course charted a decade ago, including $2 million condos that were to be built in a 10-story tower.

"Years from now, our initial vision will still be evident," Ellman said. "Our original plan, with modifications to address a changing market, was sound."

by Rebekah L. Sanders The Arizona Republic Jun. 28, 2011 12:00 AM





Glendale's Westgate City Center changed face of city

Glendale's Westgate City Center changed face of city

Westgate City Center, Glendale, Arizona David Kadlubowski/The Arizona Republic

Westgate City Center, a retail-and-entertainment center with opulent fountains and flashy billboards, opened in Glendale in 2006.


Ten years ago, Steve Ellman surveyed miles of Glendale farm fields in a helicopter and decided this was where he would build a massive sports-and-entertainment district.

The developer had fashioned a career out of envisioning what others doubted.

He promised Glendale officials their sleepy suburb would soon boast a state-of-the-art hockey arena and an urban entertainment zone.

Ellman made his dream a reality. Westgate City Center opened in 2006 with fountains and fanfare.

The Phoenix Coyotes played there, and the Arizona Cardinals moved in next door.

Then, a deep recession pummeled the region.

The fate of the hockey team was in doubt. Still, in February of this year, Ellman told West Valley leaders that a housing shortage could occur in three years.

"Hold onto your property. You will have tremendous profit," he told a Glendale audience as a speaker at Mayor Elaine Scruggs' state-of-the-city speech.

In the background, however, problems lurked.

Even as Ellman uttered those words, lenders were demanding nearly $500 million in unpaid loans used to build Westgate. The money was 2 1/2 years past due.

Last week, Ellman announced that the flagship project of his 39-year career faces foreclosure and will go to auction.

Whether this signals the end of Ellman's control of Westgate isn't yet known.

Selling a vision

The developer first saw the farm fields of his future Westgate in 2001 at Loop 101 and Glendale Avenue.

For three years, he had tried to sell Scottsdale on a plan to revive the faded Los Arcos Mall with new shops and a hockey arena for the Coyotes. Then Glendale came forward.

City leaders wanted Ellman to help push Glendale's economy beyond housing development. They were thrilled by his vision of Times Square-style flashing billboards, restaurants and glass-paned offices.

In a month, Ellman had an initial deal with Glendale, calling for him to build a $180 million arena and commercial center.

Glendale's mayor beamed and pronounced the 2001 vote "historical."

The sports district could attract 10,000 to 15,000 jobs to the Loop 101 corridor by 2012, city official Jim Colson predicted at the time.

Glendale projected that even in a dismal economy, the city could generate enough to pay off its arena and reap an extra $100 million, mostly from sales-tax revenue at Westgate. In a normal economy, that could soar to $475 million.

A city consultant called it "real revenue, not smoke."

Those numbers haven't panned out.

A fraction of the predicted jobs have sprung up thus far in the sports district, and Westgate sales-tax revenue alone has not paid the city's arena debt.

Still Mayor Scruggs points to companies that have moved to Glendale and the city's exposure on national television.

"We have built a solid foundation and created a strong vision," she has said.

Problems arise

Westgate experienced hitches early on.

Ellman changed his deal so that Glendale took out loans for arena construction instead of him. He defaulted on a $7 million loan. He was two years late opening Westgate.

Just months before it opened, he cut ties with the Coyotes, selling the team to Jerry Moyes, a Glendale trucking magnate who had heavily invested in Ellman's dream. Three years later, his former partner declared the team bankrupt.

The Coyotes were the anchor to the dream, pulling fans to Westgate. The city scrambled to save the team.

Ellman, no longer an owner, was not publicly involved. When fans planned a rally to support the Coyotes, Westgate refused to allow the gathering.

Ellman said he supported the city's efforts to find a buyer and didn't consider purchasing the team since other ownership groups were hot in pursuit.

"We did what we could to support these buyers," he said in an e-mail Friday, though he didn't offer specifics.

Ellman cited the two-year struggle to find a team buyer as one reason Westgate is on the road to foreclosure. The real-estate meltdown was the other.

Ellman would not say why he failed to make the balloon payments on several loans. His spokesman confirmed they came due in November 2008. That was before the worst of the recession and the Coyotes' bankruptcy.

An auction for Westgate's buildings, built in part with a $97.5 million loan from iStar Financial, is scheduled Sept. 19, according to Hadden Schifman, a commercial real-estate analyst with Phoenix-based IBIS Report.

Other loans from Credit Suisse for $376 million are in default, he said, and the land around Westgate will go to auction.

Ellman isn't the only developer struggling. Many tracts of land purchased and offices built near Glendale's sports district have gone to auction as some developers opted to let go as values tanked.

Few can dispute Ellman raised Glendale's profile. He landed the city its first professional sports team, the Coyotes, and then set up a white tent in farm fields as he pitched the area to the Cardinals.

He wowed skeptics when Westgate debuted as a colorful complex with Bellagio-like fountains, shops and a movie theater. It has attracted millions to Glendale.

The crowning moment was hosting Super Bowl XLII in 2008.

Westgate itself pumped about $8 million in sales taxes last fiscal year into Glendale's coffers.

Ellman once pointed proudly to a map of sports venues and commercial projects popping up and took credit for starting it all.

"We brought a billion dollars to a freaking cotton field," he said.

Future uncertain

Even if Westgate goes to auction, it isn't likely to shut down.

Lenders may allow foreclosed homes to sit empty and vacant land to grow weeds. But no one wants a commercial complex as large as Westgate with rent-paying tenants to stop bringing in business.

Ellman hopes to remain a part of the development.

"Westgate will always be my favorite project," he said. "Just as Phoenix has 24th and Camelback, Tempe has Mill Avenue and Scottsdale has Old Town, Glendale has Westgate."

The developer told Glendale leaders last week that he hopes to strike a deal before the auction with lenders to keep Westgate. At the least, he believes he could stay on with a new owner as property manager.

Failing that, Ellman will continue to own Westgate's towering billboards. The sign advertising was set up under a different company.

"I don't think he's going to give it up without a fight," Glendale Councilwoman Joyce Clark said. "It is obvious when you talk to him that Westgate is something very near and dear to his heart."

But others could be interested at the right price.

One possibility: a new Coyotes owner could benefit from remarrying the team to the entertainment complex.

Matthew Hulsizer, who was in negotiations to buy the Coyotes, said he would consider purchasing Westgate if he took over the hockey franchise. But on Monday, the National Hockey League confirmed Hulsizer had pulled out of talks with Glendale.

Cardinals President Michael Bidwill, whose team plays next door, has development aspirations, with skyscrapers planned near the football stadium.

"We aren't pursuing Westgate but are obviously following the recent developments," he said Friday.

Whoever owns the Glendale center, a new economic landscape offers scant hope of completing the course charted a decade ago, including $2 million condos that were to be built in a 10-story tower.

"Years from now, our initial vision will still be evident," Ellman said. "Our original plan, with modifications to address a changing market, was sound."

by Rebekah L. Sanders The Arizona Republic Jun. 28, 2011 12:00 AM





Glendale's Westgate City Center changed face of city

Glendale's Westgate City Center changed face of city

Westgate City Center, Glendale, Arizona David Kadlubowski/The Arizona Republic

Westgate City Center, a retail-and-entertainment center with opulent fountains and flashy billboards, opened in Glendale in 2006.


Ten years ago, Steve Ellman surveyed miles of Glendale farm fields in a helicopter and decided this was where he would build a massive sports-and-entertainment district.

The developer had fashioned a career out of envisioning what others doubted.

He promised Glendale officials their sleepy suburb would soon boast a state-of-the-art hockey arena and an urban entertainment zone.

Ellman made his dream a reality. Westgate City Center opened in 2006 with fountains and fanfare.

The Phoenix Coyotes played there, and the Arizona Cardinals moved in next door.

Then, a deep recession pummeled the region.

The fate of the hockey team was in doubt. Still, in February of this year, Ellman told West Valley leaders that a housing shortage could occur in three years.

"Hold onto your property. You will have tremendous profit," he told a Glendale audience as a speaker at Mayor Elaine Scruggs' state-of-the-city speech.

In the background, however, problems lurked.

Even as Ellman uttered those words, lenders were demanding nearly $500 million in unpaid loans used to build Westgate. The money was 2 1/2 years past due.

Last week, Ellman announced that the flagship project of his 39-year career faces foreclosure and will go to auction.

Whether this signals the end of Ellman's control of Westgate isn't yet known.

Selling a vision

The developer first saw the farm fields of his future Westgate in 2001 at Loop 101 and Glendale Avenue.

For three years, he had tried to sell Scottsdale on a plan to revive the faded Los Arcos Mall with new shops and a hockey arena for the Coyotes. Then Glendale came forward.

City leaders wanted Ellman to help push Glendale's economy beyond housing development. They were thrilled by his vision of Times Square-style flashing billboards, restaurants and glass-paned offices.

In a month, Ellman had an initial deal with Glendale, calling for him to build a $180 million arena and commercial center.

Glendale's mayor beamed and pronounced the 2001 vote "historical."

The sports district could attract 10,000 to 15,000 jobs to the Loop 101 corridor by 2012, city official Jim Colson predicted at the time.

Glendale projected that even in a dismal economy, the city could generate enough to pay off its arena and reap an extra $100 million, mostly from sales-tax revenue at Westgate. In a normal economy, that could soar to $475 million.

A city consultant called it "real revenue, not smoke."

Those numbers haven't panned out.

A fraction of the predicted jobs have sprung up thus far in the sports district, and Westgate sales-tax revenue alone has not paid the city's arena debt.

Still Mayor Scruggs points to companies that have moved to Glendale and the city's exposure on national television.

"We have built a solid foundation and created a strong vision," she has said.

Problems arise

Westgate experienced hitches early on.

Ellman changed his deal so that Glendale took out loans for arena construction instead of him. He defaulted on a $7 million loan. He was two years late opening Westgate.

Just months before it opened, he cut ties with the Coyotes, selling the team to Jerry Moyes, a Glendale trucking magnate who had heavily invested in Ellman's dream. Three years later, his former partner declared the team bankrupt.

The Coyotes were the anchor to the dream, pulling fans to Westgate. The city scrambled to save the team.

Ellman, no longer an owner, was not publicly involved. When fans planned a rally to support the Coyotes, Westgate refused to allow the gathering.

Ellman said he supported the city's efforts to find a buyer and didn't consider purchasing the team since other ownership groups were hot in pursuit.

"We did what we could to support these buyers," he said in an e-mail Friday, though he didn't offer specifics.

Ellman cited the two-year struggle to find a team buyer as one reason Westgate is on the road to foreclosure. The real-estate meltdown was the other.

Ellman would not say why he failed to make the balloon payments on several loans. His spokesman confirmed they came due in November 2008. That was before the worst of the recession and the Coyotes' bankruptcy.

An auction for Westgate's buildings, built in part with a $97.5 million loan from iStar Financial, is scheduled Sept. 19, according to Hadden Schifman, a commercial real-estate analyst with Phoenix-based IBIS Report.

Other loans from Credit Suisse for $376 million are in default, he said, and the land around Westgate will go to auction.

Ellman isn't the only developer struggling. Many tracts of land purchased and offices built near Glendale's sports district have gone to auction as some developers opted to let go as values tanked.

Few can dispute Ellman raised Glendale's profile. He landed the city its first professional sports team, the Coyotes, and then set up a white tent in farm fields as he pitched the area to the Cardinals.

He wowed skeptics when Westgate debuted as a colorful complex with Bellagio-like fountains, shops and a movie theater. It has attracted millions to Glendale.

The crowning moment was hosting Super Bowl XLII in 2008.

Westgate itself pumped about $8 million in sales taxes last fiscal year into Glendale's coffers.

Ellman once pointed proudly to a map of sports venues and commercial projects popping up and took credit for starting it all.

"We brought a billion dollars to a freaking cotton field," he said.

Future uncertain

Even if Westgate goes to auction, it isn't likely to shut down.

Lenders may allow foreclosed homes to sit empty and vacant land to grow weeds. But no one wants a commercial complex as large as Westgate with rent-paying tenants to stop bringing in business.

Ellman hopes to remain a part of the development.

"Westgate will always be my favorite project," he said. "Just as Phoenix has 24th and Camelback, Tempe has Mill Avenue and Scottsdale has Old Town, Glendale has Westgate."

The developer told Glendale leaders last week that he hopes to strike a deal before the auction with lenders to keep Westgate. At the least, he believes he could stay on with a new owner as property manager.

Failing that, Ellman will continue to own Westgate's towering billboards. The sign advertising was set up under a different company.

"I don't think he's going to give it up without a fight," Glendale Councilwoman Joyce Clark said. "It is obvious when you talk to him that Westgate is something very near and dear to his heart."

But others could be interested at the right price.

One possibility: a new Coyotes owner could benefit from remarrying the team to the entertainment complex.

Matthew Hulsizer, who was in negotiations to buy the Coyotes, said he would consider purchasing Westgate if he took over the hockey franchise. But on Monday, the National Hockey League confirmed Hulsizer had pulled out of talks with Glendale.

Cardinals President Michael Bidwill, whose team plays next door, has development aspirations, with skyscrapers planned near the football stadium.

"We aren't pursuing Westgate but are obviously following the recent developments," he said Friday.

Whoever owns the Glendale center, a new economic landscape offers scant hope of completing the course charted a decade ago, including $2 million condos that were to be built in a 10-story tower.

"Years from now, our initial vision will still be evident," Ellman said. "Our original plan, with modifications to address a changing market, was sound."

by Rebekah L. Sanders The Arizona Republic Jun. 28, 2011 12:00 AM





Glendale's Westgate City Center changed face of city

Glendale's Westgate City Center changed face of city

Westgate City Center, Glendale, Arizona David Kadlubowski/The Arizona Republic

Westgate City Center, a retail-and-entertainment center with opulent fountains and flashy billboards, opened in Glendale in 2006.


Ten years ago, Steve Ellman surveyed miles of Glendale farm fields in a helicopter and decided this was where he would build a massive sports-and-entertainment district.

The developer had fashioned a career out of envisioning what others doubted.

He promised Glendale officials their sleepy suburb would soon boast a state-of-the-art hockey arena and an urban entertainment zone.

Ellman made his dream a reality. Westgate City Center opened in 2006 with fountains and fanfare.

The Phoenix Coyotes played there, and the Arizona Cardinals moved in next door.

Then, a deep recession pummeled the region.

The fate of the hockey team was in doubt. Still, in February of this year, Ellman told West Valley leaders that a housing shortage could occur in three years.

"Hold onto your property. You will have tremendous profit," he told a Glendale audience as a speaker at Mayor Elaine Scruggs' state-of-the-city speech.

In the background, however, problems lurked.

Even as Ellman uttered those words, lenders were demanding nearly $500 million in unpaid loans used to build Westgate. The money was 2 1/2 years past due.

Last week, Ellman announced that the flagship project of his 39-year career faces foreclosure and will go to auction.

Whether this signals the end of Ellman's control of Westgate isn't yet known.

Selling a vision

The developer first saw the farm fields of his future Westgate in 2001 at Loop 101 and Glendale Avenue.

For three years, he had tried to sell Scottsdale on a plan to revive the faded Los Arcos Mall with new shops and a hockey arena for the Coyotes. Then Glendale came forward.

City leaders wanted Ellman to help push Glendale's economy beyond housing development. They were thrilled by his vision of Times Square-style flashing billboards, restaurants and glass-paned offices.

In a month, Ellman had an initial deal with Glendale, calling for him to build a $180 million arena and commercial center.

Glendale's mayor beamed and pronounced the 2001 vote "historical."

The sports district could attract 10,000 to 15,000 jobs to the Loop 101 corridor by 2012, city official Jim Colson predicted at the time.

Glendale projected that even in a dismal economy, the city could generate enough to pay off its arena and reap an extra $100 million, mostly from sales-tax revenue at Westgate. In a normal economy, that could soar to $475 million.

A city consultant called it "real revenue, not smoke."

Those numbers haven't panned out.

A fraction of the predicted jobs have sprung up thus far in the sports district, and Westgate sales-tax revenue alone has not paid the city's arena debt.

Still Mayor Scruggs points to companies that have moved to Glendale and the city's exposure on national television.

"We have built a solid foundation and created a strong vision," she has said.

Problems arise

Westgate experienced hitches early on.

Ellman changed his deal so that Glendale took out loans for arena construction instead of him. He defaulted on a $7 million loan. He was two years late opening Westgate.

Just months before it opened, he cut ties with the Coyotes, selling the team to Jerry Moyes, a Glendale trucking magnate who had heavily invested in Ellman's dream. Three years later, his former partner declared the team bankrupt.

The Coyotes were the anchor to the dream, pulling fans to Westgate. The city scrambled to save the team.

Ellman, no longer an owner, was not publicly involved. When fans planned a rally to support the Coyotes, Westgate refused to allow the gathering.

Ellman said he supported the city's efforts to find a buyer and didn't consider purchasing the team since other ownership groups were hot in pursuit.

"We did what we could to support these buyers," he said in an e-mail Friday, though he didn't offer specifics.

Ellman cited the two-year struggle to find a team buyer as one reason Westgate is on the road to foreclosure. The real-estate meltdown was the other.

Ellman would not say why he failed to make the balloon payments on several loans. His spokesman confirmed they came due in November 2008. That was before the worst of the recession and the Coyotes' bankruptcy.

An auction for Westgate's buildings, built in part with a $97.5 million loan from iStar Financial, is scheduled Sept. 19, according to Hadden Schifman, a commercial real-estate analyst with Phoenix-based IBIS Report.

Other loans from Credit Suisse for $376 million are in default, he said, and the land around Westgate will go to auction.

Ellman isn't the only developer struggling. Many tracts of land purchased and offices built near Glendale's sports district have gone to auction as some developers opted to let go as values tanked.

Few can dispute Ellman raised Glendale's profile. He landed the city its first professional sports team, the Coyotes, and then set up a white tent in farm fields as he pitched the area to the Cardinals.

He wowed skeptics when Westgate debuted as a colorful complex with Bellagio-like fountains, shops and a movie theater. It has attracted millions to Glendale.

The crowning moment was hosting Super Bowl XLII in 2008.

Westgate itself pumped about $8 million in sales taxes last fiscal year into Glendale's coffers.

Ellman once pointed proudly to a map of sports venues and commercial projects popping up and took credit for starting it all.

"We brought a billion dollars to a freaking cotton field," he said.

Future uncertain

Even if Westgate goes to auction, it isn't likely to shut down.

Lenders may allow foreclosed homes to sit empty and vacant land to grow weeds. But no one wants a commercial complex as large as Westgate with rent-paying tenants to stop bringing in business.

Ellman hopes to remain a part of the development.

"Westgate will always be my favorite project," he said. "Just as Phoenix has 24th and Camelback, Tempe has Mill Avenue and Scottsdale has Old Town, Glendale has Westgate."

The developer told Glendale leaders last week that he hopes to strike a deal before the auction with lenders to keep Westgate. At the least, he believes he could stay on with a new owner as property manager.

Failing that, Ellman will continue to own Westgate's towering billboards. The sign advertising was set up under a different company.

"I don't think he's going to give it up without a fight," Glendale Councilwoman Joyce Clark said. "It is obvious when you talk to him that Westgate is something very near and dear to his heart."

But others could be interested at the right price.

One possibility: a new Coyotes owner could benefit from remarrying the team to the entertainment complex.

Matthew Hulsizer, who was in negotiations to buy the Coyotes, said he would consider purchasing Westgate if he took over the hockey franchise. But on Monday, the National Hockey League confirmed Hulsizer had pulled out of talks with Glendale.

Cardinals President Michael Bidwill, whose team plays next door, has development aspirations, with skyscrapers planned near the football stadium.

"We aren't pursuing Westgate but are obviously following the recent developments," he said Friday.

Whoever owns the Glendale center, a new economic landscape offers scant hope of completing the course charted a decade ago, including $2 million condos that were to be built in a 10-story tower.

"Years from now, our initial vision will still be evident," Ellman said. "Our original plan, with modifications to address a changing market, was sound."

by Rebekah L. Sanders The Arizona Republic Jun. 28, 2011 12:00 AM





Glendale's Westgate City Center changed face of city

Glendale's Westgate City Center changed face of city

Westgate City Center, Glendale, Arizona David Kadlubowski/The Arizona Republic

Westgate City Center, a retail-and-entertainment center with opulent fountains and flashy billboards, opened in Glendale in 2006.


Ten years ago, Steve Ellman surveyed miles of Glendale farm fields in a helicopter and decided this was where he would build a massive sports-and-entertainment district.

The developer had fashioned a career out of envisioning what others doubted.

He promised Glendale officials their sleepy suburb would soon boast a state-of-the-art hockey arena and an urban entertainment zone.

Ellman made his dream a reality. Westgate City Center opened in 2006 with fountains and fanfare.

The Phoenix Coyotes played there, and the Arizona Cardinals moved in next door.

Then, a deep recession pummeled the region.

The fate of the hockey team was in doubt. Still, in February of this year, Ellman told West Valley leaders that a housing shortage could occur in three years.

"Hold onto your property. You will have tremendous profit," he told a Glendale audience as a speaker at Mayor Elaine Scruggs' state-of-the-city speech.

In the background, however, problems lurked.

Even as Ellman uttered those words, lenders were demanding nearly $500 million in unpaid loans used to build Westgate. The money was 2 1/2 years past due.

Last week, Ellman announced that the flagship project of his 39-year career faces foreclosure and will go to auction.

Whether this signals the end of Ellman's control of Westgate isn't yet known.

Selling a vision

The developer first saw the farm fields of his future Westgate in 2001 at Loop 101 and Glendale Avenue.

For three years, he had tried to sell Scottsdale on a plan to revive the faded Los Arcos Mall with new shops and a hockey arena for the Coyotes. Then Glendale came forward.

City leaders wanted Ellman to help push Glendale's economy beyond housing development. They were thrilled by his vision of Times Square-style flashing billboards, restaurants and glass-paned offices.

In a month, Ellman had an initial deal with Glendale, calling for him to build a $180 million arena and commercial center.

Glendale's mayor beamed and pronounced the 2001 vote "historical."

The sports district could attract 10,000 to 15,000 jobs to the Loop 101 corridor by 2012, city official Jim Colson predicted at the time.

Glendale projected that even in a dismal economy, the city could generate enough to pay off its arena and reap an extra $100 million, mostly from sales-tax revenue at Westgate. In a normal economy, that could soar to $475 million.

A city consultant called it "real revenue, not smoke."

Those numbers haven't panned out.

A fraction of the predicted jobs have sprung up thus far in the sports district, and Westgate sales-tax revenue alone has not paid the city's arena debt.

Still Mayor Scruggs points to companies that have moved to Glendale and the city's exposure on national television.

"We have built a solid foundation and created a strong vision," she has said.

Problems arise

Westgate experienced hitches early on.

Ellman changed his deal so that Glendale took out loans for arena construction instead of him. He defaulted on a $7 million loan. He was two years late opening Westgate.

Just months before it opened, he cut ties with the Coyotes, selling the team to Jerry Moyes, a Glendale trucking magnate who had heavily invested in Ellman's dream. Three years later, his former partner declared the team bankrupt.

The Coyotes were the anchor to the dream, pulling fans to Westgate. The city scrambled to save the team.

Ellman, no longer an owner, was not publicly involved. When fans planned a rally to support the Coyotes, Westgate refused to allow the gathering.

Ellman said he supported the city's efforts to find a buyer and didn't consider purchasing the team since other ownership groups were hot in pursuit.

"We did what we could to support these buyers," he said in an e-mail Friday, though he didn't offer specifics.

Ellman cited the two-year struggle to find a team buyer as one reason Westgate is on the road to foreclosure. The real-estate meltdown was the other.

Ellman would not say why he failed to make the balloon payments on several loans. His spokesman confirmed they came due in November 2008. That was before the worst of the recession and the Coyotes' bankruptcy.

An auction for Westgate's buildings, built in part with a $97.5 million loan from iStar Financial, is scheduled Sept. 19, according to Hadden Schifman, a commercial real-estate analyst with Phoenix-based IBIS Report.

Other loans from Credit Suisse for $376 million are in default, he said, and the land around Westgate will go to auction.

Ellman isn't the only developer struggling. Many tracts of land purchased and offices built near Glendale's sports district have gone to auction as some developers opted to let go as values tanked.

Few can dispute Ellman raised Glendale's profile. He landed the city its first professional sports team, the Coyotes, and then set up a white tent in farm fields as he pitched the area to the Cardinals.

He wowed skeptics when Westgate debuted as a colorful complex with Bellagio-like fountains, shops and a movie theater. It has attracted millions to Glendale.

The crowning moment was hosting Super Bowl XLII in 2008.

Westgate itself pumped about $8 million in sales taxes last fiscal year into Glendale's coffers.

Ellman once pointed proudly to a map of sports venues and commercial projects popping up and took credit for starting it all.

"We brought a billion dollars to a freaking cotton field," he said.

Future uncertain

Even if Westgate goes to auction, it isn't likely to shut down.

Lenders may allow foreclosed homes to sit empty and vacant land to grow weeds. But no one wants a commercial complex as large as Westgate with rent-paying tenants to stop bringing in business.

Ellman hopes to remain a part of the development.

"Westgate will always be my favorite project," he said. "Just as Phoenix has 24th and Camelback, Tempe has Mill Avenue and Scottsdale has Old Town, Glendale has Westgate."

The developer told Glendale leaders last week that he hopes to strike a deal before the auction with lenders to keep Westgate. At the least, he believes he could stay on with a new owner as property manager.

Failing that, Ellman will continue to own Westgate's towering billboards. The sign advertising was set up under a different company.

"I don't think he's going to give it up without a fight," Glendale Councilwoman Joyce Clark said. "It is obvious when you talk to him that Westgate is something very near and dear to his heart."

But others could be interested at the right price.

One possibility: a new Coyotes owner could benefit from remarrying the team to the entertainment complex.

Matthew Hulsizer, who was in negotiations to buy the Coyotes, said he would consider purchasing Westgate if he took over the hockey franchise. But on Monday, the National Hockey League confirmed Hulsizer had pulled out of talks with Glendale.

Cardinals President Michael Bidwill, whose team plays next door, has development aspirations, with skyscrapers planned near the football stadium.

"We aren't pursuing Westgate but are obviously following the recent developments," he said Friday.

Whoever owns the Glendale center, a new economic landscape offers scant hope of completing the course charted a decade ago, including $2 million condos that were to be built in a 10-story tower.

"Years from now, our initial vision will still be evident," Ellman said. "Our original plan, with modifications to address a changing market, was sound."

by Rebekah L. Sanders The Arizona Republic Jun. 28, 2011 12:00 AM





Glendale's Westgate City Center changed face of city

Arizona's jobless able to keep homes with help of federal funds

Even as unemployment aid in Arizona dwindles, a federally funded program is quietly helping more people in the state afford their mortgages after they lose a job.

An Arizona Housing Department program called Save Our Home AZ gives qualified homeowners cash assistance to make their mortgage payments if they are unemployed or underemployed.

The program uses $36 million of a Treasury Department allocation given to states suffering the most from the real-estate crash.

When the aid program launched last year, the cash-assistance plan was largely overshadowed by another portion of the plan that aimed to help homeowners by modifying their mortgages to reduce their payments. The money paid for paperwork assistance and gave lenders incentives to modify loans.

But the loan-modification plan has foundered, partly because it requires that banks forgive a portion of the amount borrowers owe, something lenders are reluctant to do.

As Housing Department officials found themselves unable to use the money for loan modifications, they ramped up the mortgage-aid aspect of the program.

The department can offer qualified homeowners up to $2,000 a month to pay their mortgages for as long as 24 months.

Housing advocates applaud the program and say not enough homeowners know about it. So far, 67 Arizona homeowners have received aid, and the agency expects hundreds more will follow this year. The program has until 2017 to spend the money, and almost 900 applications are pending.

Help under way

Heather Owens applied for mortgage help from the Housing Department four weeks ago and has been approved and has made her first partial payment. The Housing Department is helping her, with $287 a month, make the payment on the Tempe home she and her husband, Daniel Owens, have owned for 17 years. Their two children, who go to Scottsdale Community College, live in the guesthouse in the back and pay the couple rent.

"I was working in the offices of an air-conditioning firm when my mother got ill," Heather said. "I took temporary leave to take care of her, but when I went to get my old job back, it was gone."

Daniel works full time as an AC repairman, but his hours go down in the winter and spring.

Heather said the couple used savings to make their mortgage payments for more than a year while she looked for another job. Then, she was contacted by her lender about obtaining a loan modification with a lower monthly payment. She thought the offer came at a perfect time.

She filled out the paperwork and was told she qualified and to stop making her payments until her loan was modified. She said she kept calling and never heard back, until the lender told her it had started foreclosure proceedings against her in March.

The Owens' story has become common. Lenders initially approved borrowers for loan modifications and later started foreclosure proceedings.

Heather heard about the Housing Department's program and found its website.

"It was so easy to apply, and the housing counselors are so nice," she said. "I was so depressed before. I would have sold everything to save our house."

Who qualifies

Not all unemployed homeowners qualify for the Housing Department aid.

The applicant must live in the home. Applicants must show they are unemployed or have reduced income and can no longer afford their mortgages.

A homeowner can't owe more than 120 percent of what the house is worth now. So, many homeowners won't qualify because home values have dropped 55 percent since the boom.

A borrower can't have cashed out any equity through a refinancing or second mortgage. Many metro Phoenix homeowners tapped their equity during the first half of the past decade as home values soared. Finally, the borrower must be 60 days behind on his or her mortgage payment.

The requirements may sound tough, but several have been recently changed so more people can qualify.

"The program has been updated," said Patricia Garcia Duarte, chief executive of the non-profit Neighborhood Housing Services of Phoenix Inc. "I believe many people don't know about the program. More people should now be able to qualify."

Loan modifications

The Treasury Department's so-called Hardest Hit Housing program focused mostly on loan modifications, setting aside far more money for those plans - more than $230 million in Arizona. But that segment has been a disappointment to borrowers, the federal government and the Housing Department.

The plan requires lenders to write down as much as $50,000 of a borrower's principal, which the Housing Department will match. The idea is to reduce the loan amount and monthly payments enough so homeowners can avoid foreclosure and aren't tempted to walk away from their homes.

The Housing Department has been able to complete only four loan modifications in Arizona. Early this year, Bank of America agreed to work more diligently with the state on the program. Housing Department Director Michael Trailor believes the first BofA loan modification under the program will be finalized in the next week.

For now, the payment-assistance program is mostly helping homeowners who are waiting for a new job rather than a loan modification.

Heather Owens is going to night school to become a chemical-dependence counselor.

She said her lender wouldn't even help her try to find Arizona's payment-aid program.

Trailor and housing counselors hear similar stories all the time. He is glad Owens didn't give up.

"We want to get the word out to people unemployed and underemployed," Trailor said.

by Catherine Reagor The Arizona Republic Jun. 28, 2011 12:00 AM


Arizona's jobless able to keep homes with help of federal funds

Arizona's jobless able to keep homes with help of federal funds

Even as unemployment aid in Arizona dwindles, a federally funded program is quietly helping more people in the state afford their mortgages after they lose a job.

An Arizona Housing Department program called Save Our Home AZ gives qualified homeowners cash assistance to make their mortgage payments if they are unemployed or underemployed.

The program uses $36 million of a Treasury Department allocation given to states suffering the most from the real-estate crash.

When the aid program launched last year, the cash-assistance plan was largely overshadowed by another portion of the plan that aimed to help homeowners by modifying their mortgages to reduce their payments. The money paid for paperwork assistance and gave lenders incentives to modify loans.

But the loan-modification plan has foundered, partly because it requires that banks forgive a portion of the amount borrowers owe, something lenders are reluctant to do.

As Housing Department officials found themselves unable to use the money for loan modifications, they ramped up the mortgage-aid aspect of the program.

The department can offer qualified homeowners up to $2,000 a month to pay their mortgages for as long as 24 months.

Housing advocates applaud the program and say not enough homeowners know about it. So far, 67 Arizona homeowners have received aid, and the agency expects hundreds more will follow this year. The program has until 2017 to spend the money, and almost 900 applications are pending.

Help under way

Heather Owens applied for mortgage help from the Housing Department four weeks ago and has been approved and has made her first partial payment. The Housing Department is helping her, with $287 a month, make the payment on the Tempe home she and her husband, Daniel Owens, have owned for 17 years. Their two children, who go to Scottsdale Community College, live in the guesthouse in the back and pay the couple rent.

"I was working in the offices of an air-conditioning firm when my mother got ill," Heather said. "I took temporary leave to take care of her, but when I went to get my old job back, it was gone."

Daniel works full time as an AC repairman, but his hours go down in the winter and spring.

Heather said the couple used savings to make their mortgage payments for more than a year while she looked for another job. Then, she was contacted by her lender about obtaining a loan modification with a lower monthly payment. She thought the offer came at a perfect time.

She filled out the paperwork and was told she qualified and to stop making her payments until her loan was modified. She said she kept calling and never heard back, until the lender told her it had started foreclosure proceedings against her in March.

The Owens' story has become common. Lenders initially approved borrowers for loan modifications and later started foreclosure proceedings.

Heather heard about the Housing Department's program and found its website.

"It was so easy to apply, and the housing counselors are so nice," she said. "I was so depressed before. I would have sold everything to save our house."

Who qualifies

Not all unemployed homeowners qualify for the Housing Department aid.

The applicant must live in the home. Applicants must show they are unemployed or have reduced income and can no longer afford their mortgages.

A homeowner can't owe more than 120 percent of what the house is worth now. So, many homeowners won't qualify because home values have dropped 55 percent since the boom.

A borrower can't have cashed out any equity through a refinancing or second mortgage. Many metro Phoenix homeowners tapped their equity during the first half of the past decade as home values soared. Finally, the borrower must be 60 days behind on his or her mortgage payment.

The requirements may sound tough, but several have been recently changed so more people can qualify.

"The program has been updated," said Patricia Garcia Duarte, chief executive of the non-profit Neighborhood Housing Services of Phoenix Inc. "I believe many people don't know about the program. More people should now be able to qualify."

Loan modifications

The Treasury Department's so-called Hardest Hit Housing program focused mostly on loan modifications, setting aside far more money for those plans - more than $230 million in Arizona. But that segment has been a disappointment to borrowers, the federal government and the Housing Department.

The plan requires lenders to write down as much as $50,000 of a borrower's principal, which the Housing Department will match. The idea is to reduce the loan amount and monthly payments enough so homeowners can avoid foreclosure and aren't tempted to walk away from their homes.

The Housing Department has been able to complete only four loan modifications in Arizona. Early this year, Bank of America agreed to work more diligently with the state on the program. Housing Department Director Michael Trailor believes the first BofA loan modification under the program will be finalized in the next week.

For now, the payment-assistance program is mostly helping homeowners who are waiting for a new job rather than a loan modification.

Heather Owens is going to night school to become a chemical-dependence counselor.

She said her lender wouldn't even help her try to find Arizona's payment-aid program.

Trailor and housing counselors hear similar stories all the time. He is glad Owens didn't give up.

"We want to get the word out to people unemployed and underemployed," Trailor said.

by Catherine Reagor The Arizona Republic Jun. 28, 2011 12:00 AM




Arizona's jobless able to keep homes with help of federal funds

Real Estate News