The Dealmaker: 10/12/2017

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The Dealmaker is a daily note of the day’s top real estate stories served just in time for lunch. Bon Appetit! Subscribe here to receive the Dealmaker to your inbox


[EDITORIAL] Pinal’s water supply. (Disclosure: Rose Law Group represents Copper Mountain Ranch.) While stressing the importance of water planning and policing making, PinalCentral also makes clear in its “Our View” editiorial that “enough water exists for serious developments into the foreseeable future” as water “planners continue to tweak their modeling and estimates.” (And this assessment includes enough water for “more than 12,000 homes” at Copper Mountain Ranch.) 

KEEP ON TRUCKIN’? – Water fight balloons between Phoenix and Desert Hills, New River. “Water-hauling trucks in Desert Hills and New River will not be allowed to fill their vehicles at Phoenix fire hydrants after December 31… It’s unclear what many of the area’s roughly 15,000 residents will do for water if an agreement or stopgap measure isn’t reached before the end of the year.” KEY QUOTE: “We’re scared. We’re terrified.” The story in Phoenix New Times

HFF closes $282M in financing for Ritz-Carlton development in Paradise Valley. (Disclosure: Rose Law Group represents Shea Homes, Azure.) “Holliday Fenoglio Fowler, L.P. worked on behalf of the developer, Five Star Development, to place the $210 million senior land and construction loan facilities with Bank of the Ozarks, and the $72 million mezzanine financing with Starwood Property Trust, Inc. Loan proceeds will be used to refinance an existing land loan and construct The Ritz-Carlton hotel and residences.” More on this financing deal, which HFF exec Bryan Clark calls a “complex transaction,” at AZRE.

Meritage reloads at La Estancia / Richmond continues acquisition surge this time at Dove Mountain. “Meritage Homes acquired 142 SFR lots [for $6.25 million] at La Estancia having almost completed its first phase of 195 lots in this new master planned community since opening in June 2016.” REDNews also reports that “Richmond American, continuing its acquisition surge, bought 98 lots at Bridge Pass II in Dove Mountain in Marana for $6.8 million…” For a closer look at the two deals, tap it:

The Block at Pima Center development attracts retailers, hotels. “Located on the northwest corner of the Loop 101 and Via de Ventura on the Salt River Pima Maricopa Indian Community, The Block at Pima Center… has already attracted 28,835 square feet of retail space and two hotels with a total of 166 rooms… [Now], five retail tenants and two hotels have committed to the project… Plans call for all of the spaces to be open for business mid-year 2018.” And, in what could be described as a unique design twist, the two hotels “will share common registration and lobby space.” More in Scottsdale Independent.

The Grove brings high-end shopping, dining destinations to McCormick Ranch. “Located at the southwest corner of Hayden Road and McCormick Parkway… the 32,000-square-foot mixed-use project is the latest from developer DBM Ventures and general contractor LGE Design Build, who are teaming up with Finn Architects and AV3 Design on the high-end addition to McCormick Ranch.” Details and renderings at AZRE.

Ottawa University Arizona breaks ground on state-of-the-art sports field.“Surprise Mayor Sharon Wolcott, city councilmembers and economic development officials joined Ottawa University President Kevin Eichner and OUAZ athletic coaches and leadership in the recent groundbreaking event at the athletic field south of the Civic Center Plaza… The 97,000 square-foot competitive athletic field for football and soccer is being built to NAIA/NCAA standards and to host national competitions.” More on the state-of-the-art facility at AZRE.

Interest in Park Place retail space. “As construction of Park Place on the Avenue of the Fountains accelerates, businesses are exploring whether the ground-level retail units might be a good fit for them.” Fountain Hills Times reports that the “developer has pending leases for 23 percent of the available… retail space and letters of pending interest for another 14 percent…” For details on the businesses planning to set up shop, plus info on whether Park Place has had any luck attracting an Irish pub, go here:

Park Place financial partner offers clarification on town attorney meeting. “Two days after the [Fountain Hills] Town Council voted to terminate Andrew McGuire as town attorney, council members received an email from Bruce Hazzard, vice president of development for Real Capital Solutions, the primary financial partner with N-Shea Group as developer of Park Place and the Morningstar Assisted Living Residence. Hazzard’s email provides clarification regarding McGuire’s contact with an attorney for RCS.” (For background on this story, see this related item, “Fountain Hills Council fires legal team,” also in Fountain Hills Times.

Fry’s opening new Apache Junction store; grand opening Oct. 27. “Local dignitaries, community partners and Fry’s management will participate in a ribbon-cutting ceremony… [for] the grand opening of [Fry’s] newest Marketplace Store at 150 E. Old West Highway ” Check out the “new store’s amenities and services” at Apache Junction Independent.

ASU continues planning Phoenix Biomedical Campus expansion. “Early draft plans for the expansion of the Arizona State University Biomedical Campus were unveiled Tuesday. The goal of the expansion [on land ‘located north of Fillmore between Garfield, Fourth and Sixth’] is to create a multidisciplinary medical innovation space that not only benefits university student and professors, but also community members.” Linsey Graff, associate with Ayers Saint Gross Architects: “They’re really community focused spaces so that it isn’t ‘If I’m not a professor’ or ‘If I’m not a student’ I don’t need to be there.” To wrap your head around all those double negatives and learn more about the expansion, don’t not go to Downtown Devil –>

Supporters tout petition for San Tan Valley incorporation. “[I]n a press conference at San Tan Flat on Tuesday… Vote San Tan urged community members to remember that the petition to put incorporation on the ballot is about letting San Tan Valley residents have a say in their collective future as a community… ‘We are either going to be absorbed by other communities or chart our own course,’ [said steering] committee member Mike Torres.” More on the potential incorporation along what it’s going to take to get it on the ballot, at Casa Grande Dispatch.

Tucson to annex 652 acres — largest in recent history — on southeastside. “[The Tucson City Council] unanimously voted in favor of bringing in roughly 3,100 residents located southeast of South Swan and East Valencia roads and north of the Los Reales landfill, with estimates that the annexation will bring in a combined $25 million in revenues over the next decade.” Tap to Arizona Daily Star to find out what businesses are included in the annexation, and how city officials were able to “[sell] the measure to residents…”

ADDITION & SUBTRACTION – City says Casa Grande man’s addition must come down. “Victor D’Souza’s addition to his home on Ninth Street is encroaching into the city’s right of way and doesn’t meet the required setbacks from the property line, said Casa Grande Planner Laura Blakeman… The Board of Adjustment voted 5-1 to order the addition removed.” “Callous Quote of the Day” comes courtesy of Board of Adjustment member David Snider, who said this in “referring to granting the variance”: “It’s hard to be supportive.” Casa Grande Dispatch.

Does your community have a ‘Great Place’? (If the dude in the above story sees this headline, he’ll probably grumble to himself, “Well, I used to have a great place.”) “The American Planning Association recently announced its 15 Great Places for 2017, recognizing authentic and unique streets, neighborhoods, and public spaces across the country.” See what Arizona city-street made the list, in REALTORMag.

Off-site construction: 50% time savings with challenges. “This year, you are on track to build 500 homes. Congratulations. What if next year, you were able to increase production by 40%, so you could then build 700 homes in the same time and at a lower cost? That’s what is possible with modular construction. Carol Galante shares insight in Builder. (Some of you may be wondering, “Who the heck is Carol Galante?” Oh, she’s just the “I. Donald Terner Distinguished Professor in Affordable Housing and Urban Policy and the faculty director of the Terner Center for Housing Innovation at UC Berkeley, plus the chief innovation officer at Factory_OS.” (NOTE: Even though our comment comes across as if we had knowledge of that info before reading the article, we didn’t.)

A tale of two housing economies. Builder’s John McManus looks at two trends — “slower household formation growth due to less affordability in many places, and the slight improvement in the share of rent-burdened households,” citing them as “evidence [that] vested and invested players in residential real estate development and construction are working in not one, but two, related but disconnected housing businesses.”

Loan Performance Insights Report highlights: July 2017. And here are those highlights from CoreLogic’s report, bullet-pointed for your convenience: • The U.S. foreclosure rate remained at a 10-year low in July 2017 • The current-to 30-day transition rate edged down in July 2017 from a year earlier • Denver had the lowest foreclosure rate of the largest metro areas.

MBA Weekly Survey: Mortgage apps fall 2.1%. “Interest rates rose across all mortgage loan types over the week ending October 6th.” Builder breaks down the numbers –>

Former Phoenix mayor Phil Gordon staying out of race. “ ‘I looked at (running) a few months ago, did some polling, would love to, but right now… the answer is no,’ Gordon told KTAR.” Ahh, but note how the former mayor (from 2004-2012) couches his intention with the phrase “right now.” Perhaps down the road he’ll jump into the race, and — right now — is just using a little of what some around Dealmaker HQ are calling “reverse electology”?

New poll in Phoenix Mayor’s race. (It doesn’t, but how crazy would it be if this new poll showed Phil Gordon in the lead?) The Arizona Battleground Poll(commissioned by a partnership between FirstStrategic Communications and Public Affairs and Summit Group) shows that “Councilman Daniel Valenzuela has a very slight lead, but also within the margin of error showing this is anyone’s race to win.” Check it out in Rose Law Group Reporter.

Dealmaker BONUS: City Hall catches fire in small Arizona town of Bisbee. “A blaze tore through Bisbee City Hall in southern Arizona early Wednesday, put out only after crews from eight fire departments fought together. [Fortunately! there were] no injuries but there was serious damage to the building.” KTAR notes that the “former mining town has earned praise as the country’s best historic small town and best small town.” And we might add that, based on the report and accompanying  photo, the town might also now find itself in the running for “Best City Hall Conflagration.” (Or would it be “Worst”?) 

One month to go before the greatest show on grass, the Bentley Scottsdale Polo Championships –

As a supplement to the Dealmaker, we thought you might enjoy these articles!

ANTIQUATED ‘ANTIQUITIES ACT’? – House advances bill to limit president’s creation of national monuments. “The bill [co-sponsored by Rep. Paul Gosar, R-Prescott] would severely curtail the [‘century-old’ Antiquities Act], limiting the amount of land a president could designate, requiring public input into the process and setting a one-year limit on any emergency designation that is needed to head off ‘imminent and irreparable harm’ to a site.” Cronkite News.

No trial by jury: How Americans are denied their rights. “In City Court: Prosecutors Push Jail for Disabled Vietnam Veteran Over Zoning Violations, Goldwater Institute National Investigative Reporter Mark Flatten continues his examination of Arizona’s city court system, this time through the eyes of 69-year-old Bob Stapleton, a Phoenix resident who was hit with six criminal misdemeanor charges for zoning violations on his farm property.” Read the rest of the synopsis and access the full report in Rose Law Group Reporter.

Arizona tribes, ASU get Trump coal money. “The grants… include more than $624,000 going to Arizona including $99,999 for Arizona State University to help Page, Arizona transition from coal-based energy production to renewable sources.” To find out how the rest of the funds are being distributed, click to Phoenix Business Journal.

Intel takes on money launderers. “Intel Wednesday released intelligent software that targets money-laundering.” Axios reports that the “software rapidly looks for hidden patterns in reams of emails, texts and other bank and insurance data that can indicate criminal behavior. Then it flags any anomalous data for human investigators, who [can] check [in real time] whether in fact money laundering is going on.”

Harvey Weinstein travels to Arizona rehab for behavioral treatment.“Weinstein, who was ousted from his company after The New York Times published an explosive report detailing decades of sexual harassment claims against the movie producer, is… expected to get treatment for behavioral issues, including sex addiction, at The Meadows in Wickenburg.” KTAR (And if you think about it, the choice of Wickenburg makes a lot of sense for someone like Harvey, given the town’s close proximity to Vulture Mine and all.)

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Optima Kierland condominium tower more than 75% sold Read more

CoreLogic analysis shows more than 172,000 homes at risk from wildfires in Napa and Santa Rosa Read more

CoreLogic reports serious delinquency rate for home loans holds steady at a near 10-year low Read more

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October 2017