Copyright The Street
The Ritz-Carlton brand of luxury properties is the parent company behind more than 110 hotels around the world. The efforts to open another one in Arizona’s Paradise Valley date back almost 20 years, when local developer company Five Star Development Properties revealed plans for a 215-room resort in the stretch of desert near Scottsdale known for its high concentration of golf courses and affluent homes. A long string of delays initially around the economic recession of 2008 and later the Covid-19 pandemic pushed the start of construction back until 2018, and, while some progress has been made, economic setbacks continued to stall the opening of the resort that is to be known as The Palmaraie. Five Star Development and about 33 affiliates connected to the project filed for Chapter 11 bankruptcy on Nov. 4 in the Southern District of Texas after primary lender Madison Realty Capital sought foreclosure of the project amid rising debts. A new Ritz-Carlton hotel in Arizona has been flagged by lawsuits and delays Earlier in the year, the New York-based investment firm with offices in Texas sought to foreclose Five Star’s hotel properties in El Paso that were used as collateral for the $585 million construction loan that Madison provided. District Court Judge Francisco Dominguez issued a temporary injunction on foreclosing for more details around Five Star’s financial position to be sussed out in court while both sides accused the other of acting in bad faith and mismanaging the loan. Five Star owner Jerry Ayoub accused Madison of “strong-arm shark tactics” that created a situation in which it had to default in October 2024. The bankruptcy, in turn, is a last-ditch effort to buy time and prevent foreclosure as the case moves through the courts. While Five Star reiterates “unwavering” commitment, problems with Ritz-Carlton project loom “This process provides the structure and transparency needed to bring the resort to completion and preserve the integrity of one of the most important developments in Arizona,” Ayoub said in a statement that also states that the company’s “commitment to the Ritz-Carlton brand, our buyers, and our community remains unwavering.” More on travel: Major airline launches surprising flight between Las Vegas and Paris United Airlines CEO gives stark warning on Olympic Games The highest rooftop in Barcelona is in a surprising place US government issues sudden warning on Switzerland travel The bankruptcy names 34 Five Star affiliates with unsecured debts of over $17.4 million, while the total spent on the project is already at $2 billion. While Five Star repeatedly claimed that construction of the development project that includes both the resort itself and 80 villas and 32 estate homes is nearly complete, the opening date has been repeatedly pushed back from 2023 to 2024 and now to 2027. Multiple Google reviews praising the construction as almost done and soon to be a “luxury paradise” do not appear to be posted organically, as it is rare for posters to review hotels that have not yet opened.
