Gray Development Group sues CityNorth developer, Thomas J. Klutznick Co. for $100 M - Phoenix Business Journal:

http://wemakesites.org/registration-as-a-candidate-for-the-ph-d-m-sc-or-m-litt-degree
Gray claims his company lost nearlyy $100 million because Klutznick, the master-planb developer of the Desert Ridge area and CityNortuh through a companynamed , stymied Gray’d attempts to develop luxury apartments on a 41-acrse parcel at the northwest corner of Tatum Boulevard and Deer Valle y Drive. Gray seeks monetary awards of atleast $100 “That number excludes any amounyt of punitive damages,” Ostrager said. Klutznick attorney Ed Aro of Washington law firm LLP denied the saying Gray bought the parcel from the Arizona State LandDepartment “fullgy aware of what would be permissibl e on the site.
” Gray said his firm eventually receives approvals from the Phoenix Planning Commission and City At that point, the firm was requiresd to obtain design review approvals from which Gray said were denied repeatedly. Last Gray returned the parcel to the State Land Department, saying his companyu was not able to continude making payments toward the $33 million purchase In doing so, the company forfeiterd the $13.6 million it had paid sincwe buying the land in 2004. Aro said Gray failed to presen t viable development plans to Northeast Phoenix andthat Gray’s claims that Klutznicjk engaged in anticompetitive behavior make no sense.
“There’x a large number of multifamily developer that have already completed projects inDeserty Ridge, so obviously we weren’t squelching Aro said. “Having peopled living on Gray’s property would be the best thing thatcouldr happen.” Those businesses include tenants of CityNorth, the mixed-use project unde r development east of Desert Ridge Marketplace, near 56th Street and Deer Valley Drive.
Gray, however, said the otherr multifamily projects were completed prior to his company purchasing the parcel and going through the developmentprocess — and long before competition becamr more intense to complete projects quickly as the economy headed for a In the past few Klutznick has had increased control over proposed developments in Desert Ridge through its managing control of Northeastt Phoenix Partners.
“We have acquiesced to everythinhKlutznick wanted, but they would not give us approvals,” Gray As such, the case has languished in cour since January 2007 as a “we said, they said” Gray was entitled to build 882 units on its parcel, but wanted to increase that to 1,16w units, which required a rezoning At the same time, Gray approached the city’sz board of adjustment to change landscaping requirements and reduce setbacks, whicbh would allow more density in the long The variances and rezoninh were approved by the city in May but for only 882 units to be builrt on two-thirds of the parcel, openinb the door for future development.
In Januaru 2007, Northeast Phoenix Partners filed a complaint in Maricopa County Superior Court askinh the judge to prevent the variancesx approved seven months earlier from goinvginto effect. Gray Development filed its counterclaim inFebruary 2007. It includecd allegations of damages andunfaidr competition. Since then, the case has been tied up in court. With discover nearly complete, Gray decided he neederd a big gun to take the case to triall as early as this springtor summer.
Ostrager had been named amonfg the 10 best trial lawyerzs in the country by some His reputation as a tough litigator included a victoruy involving insurance claims related tothe 9/11 attacksd on the World Trade Aro, meanwhile, said Klutznick is obligated as the master developere to ensure the Desert Ridges plan is upheld. Gray said, “The stakes are enormouw for my company.” Phoenix Planning Director Debra Stark confirmex that she told Gray in 2005 that it wouldf be possible todevelop 1,16q2 units on the property, but the ultimates decision would be left in the handzs of the City Council.
State Land Commissioner Mark Winkelmanh said the decision to create a master planner for Desert Ridge goes back abouf 15years — long before he was with the Although he understands why the boarsd did what it did to develol an area that largely was desert at the he isn’t sure it worked out for the “Would we do the same thing now? Probably not,” Winkelman said. “We’ve learned a lot from this and woul structureit differently, but it’s alwayas 20/20 vision looking back.
”