A Win For Five Star Development

A jury has resolved a significant legal battle surrounding the $2 billion Ritz-Carlton, Paradise Valley. The case, which has dragged on since 2021, pitted Scottsdale-based Five Star Development against Las Vegas-based PWI Construction Inc., the project’s former general contractor.

The legal dispute centered around payment issues, construction delays, and contract disagreements. The outcome may signal a turning point for the luxury development, which has faced years of delays and financial challenges.

Jury’s Decision Favors Five Star

The 10-member jury largely ruled in favor of Five Star Development. Of the $7 million in liens PWI filed, the jury determined only $428,869 was owed to the contractor. This decision significantly reduces PWI's claims and underscores Five Star's stance in the legal battle.

Key points about the dispute include:

• PWI Construction alleged unpaid invoices totaling over $7 million.
• Five Star accused PWI of breaching their contract and failing to fulfill its obligations.
• The jury sided with Five Star on eight of 12 claims.

With this verdict, Five Star can focus on completing the long-delayed project.

Challenges Along The Way

The Ritz-Carlton, Paradise Valley project, spanning 122 acres, has faced numerous setbacks since home sales began in 2018. These delays have frustrated buyers and contractors alike.

Some challenges include:

• Construction financing issues delaying progress in 2023.
• A change in general contractors after PWI stopped work in late 2021.
• Additional lien claims, including a $15.9 million mechanics lien by F Robert Construction, which has since been resolved.

Despite these issues, the developer has made progress in recent months, with critical amenities nearing completion. It will be interesting to see when and if the Fendi Private Residences project breaks ground above The Palmeraie.

Villas & Estates Begin Occupancy

The Ritz-Carlton Villas, a collection of 80 presold luxury residences in Paradise Valley, are gradually becoming occupied. While construction delays affected some buyers, others have started moving into their homes.

Key updates on the residences:

• The Villas include 80 units, all presold, with a portion of owners now moved in.
• A clubhouse, pool, and grounds for the Villa complex are complete.
• Thirty-two estate homes, priced between $10 million and $20 million, are also under development. Fifteen have already been sold.

This gradual progress suggests the project is regaining momentum.

The Road Ahead

The centerpiece of the Ritz-Carlton is its five-star hotel, is slated for a fall 2025 opening. It will feature the Arizona debut of Mott 32, a high-end Chinese restaurant. As work continues, Five Star Development appears to be navigating past hurdles and refocusing on delivering the luxury community it promised.

With much of the litigation now behind them, attention will shift to delivering on deadlines and providing residents with the high-end living experience they’ve been anticipating.