Camelback Tower, at 6900 E. Camelback Road, and Camelback Executive Park, at 6991 and 6981 E. Camelback Road, are scheduled for trustee sale April 1.
Those properties and two other parcels, including the former Orchidtree Apartments, were assembled by ICP in 2006 to create a glitzy mixed-use project dubbed the District at Camelback. Now, however, ICP Chairman Tom Donahue concedes the proposed development is dead.
Scottsdale Mayor Jim Lane said he’s not surprised to hear of the foreclosure action, adding that he figured the District at Camelback was a project whose time would never come.
“I know the properties that were involved have been troubled for some time, but I didn’t know there was a foreclosure coming up,” said Lane, who did not want to point fingers at the developer for failing to deliver. “There’s a few thousand developers who have encountered problems. My role is not to criticize. The fact is that, at the height of the market, developers could hardly make a mistake.”
Despite troubles with these properties, Donahue said ICP remains actively involved in Valley real estate. He is confident that ICP will hold on to the two office complexes facing foreclosure.
“We’re currently in negotiations with the lenders, and no, I don’t think we’re going to lose those assets,” he said.
Reached at his offices in Whitefish, Mont., Donahue said he still has two Scottsdale employees and is moving to salvage the company’s Valley assets and pursue new opportunities here and on the West Coast.
He said ICP still owns the Veritas luxury townhouse project at McCormick Ranch. It’s not finished, and ICP is in a legal battle with the original lender, MidFirst Bank of Oklahoma City. Donahue argues that MidFirst did not fully fund the $15.5 million construction loan it promised.
MidFirst initiated foreclosure proceedings on Veritas on Feb. 6, 2009, but records at the Maricopa County Assessor’s and Recorder’s offices still show ICP as the owner.
“We’ve been going back and forth for about a year, but I think we’ll have this resolved in four to six weeks,” Donahue said.
Calls to MidFirst Bank were not returned by press time.
Another asset that ICP has held on to, albeit tenuously, is the Lincoln Center office complex at 6900 E. Lincoln Drive. It was noticed for foreclosure in September 2008 by Wells Fargo Bank, but Donahue said his firm retains ownership and is making plans to redevelop the property.
“We’re having discussions right now with new capital sources,” he said.
Despite Donahue’s optimistic prognosis, he confirmed that several ICP properties slated for development have changed hands since the economy went south.
The Orchidtree apartments at 68th Street and Camelback Road, which also were part of the District at Camelback plan, went back to the lender after ICP forced renters to move out to make way for a ground-up luxury condominium project. The 8.6-acre parcel has been vacant for three years.
In a deal that attracted little attention, Chicago architect David Hovey, who developed the acclaimed Optima at Camelview Village condos up the street, purchased the Orchidtree property in July 2009 for
$16 million — compared with the $36 million ICP paid in 2006.
Calls to Hovey’s Optima headquarters in Chicago were not returned by press time.
Another lost parcel is 6828 E. Camelback Road, a small office building that was sold at auction in January 2009 by lender
National Bank of Arizona. In that case, buyer TD Note LLC of Paradise Valley paid the same $2.5 million price that ICP paid for the property in 2006. Arizona Corporation Commission records show the members of TD Note LLC are Daniel D. Diethelm, Gila River Ranches LLC and El Fondo LLC.
ICP also lost a Chandler property to foreclosure. The 33 acres at the southwest corner of Kyrene Road and Gila Lane were sold in March 2009 to Corporate Holdings II LLC for $8.75 million, more than ICP paid for the land in June 2007. ICP’s lender was First National Bank of Olathe in Scottsdale. A search of Corporation Commission records found no listing for Corporate Holdings II LLC.
Donahue said he doesn’t regret losing that property.
“We gave that property back to the bank,” he said. “It was going to be a massive office and industrial concept, but the basis turned out to be too high.”
