February 6, 2009 - Montelucia Resort - Crown Development, Paradise Valley AZ

Montelucia Resort in Paradise Valley is targeted for foreclosure

Montelucia - still has 12 more villas to sell "Starting in the low two millions"

The lender behind the new Montelucia InterContinental Resort & Spa in Paradise Valley has begun foreclosure proceedings against the project.

The project's developer, Crown Montelucia Associates LLC, wants to avoid foreclosure, "has worked diligently to avoid this outcome," and is working on several solutions, according to a statement issued by resort owner and developer Robert Flaxman.

The amount owed to Eurohypo AG is "significantly less" than the original $180 million loan, Flaxman added. Eurohypo AG is a German-based real estate bank.

The 34-acre Montelucia opened Nov. 4, 2008.The resort remains open and will continue to exist regardless of the foreclosure proceedings due to a previously established long-term management agreement.

Valeriano Antonioli, resort and spa managing director, said it will be business as usual, noting that the proceedings are a legal matter between the resort and its owner. He said the resort has exceeded its goals for its first three months of operation, and this week has operated at 100-percent occupancy.

Eurohypo AG also believes it is in its best interests to keep the resort open and advanced funds to pay bills this week, according to the statement.

Original Story - Arizona Republic

                              Additional Story

The New York branch of Eurohypo AG has taken action to foreclose on the InterContinental Montelucia Resort & Spa, as well as portions of the residential development that surrounds it.

According to a notice of trustee’s sale filed Jan. 26 with the Maricopa County Recorder’s Office, development firm Crown Realty & Development Inc. of Southern California defaulted on a promissory note for $180 million.

In a written statement released Friday afternoon by the Martz Agency, Crown’s public relations firm, the foreclosure action does not include multimillion-dollar homes that already have been purchased within the exclusive development.

The statement confirms that “the lender behind Montelucia has filed a notice of default and began foreclosure proceedings against the property, resort and unsold villas. Crown has worked diligently to avoid this outcome and will continue these efforts to avoid foreclosure.”

The foreclosure sale, which will be conducted by appointed trustee Scott Klundt of the Phoenix law office of Quarles & Brady LLP, is set for April 29.

Attempts to reach Klundt were unsuccessful. It is unknown whether the action will result in liens or other encumbrances being placed on private homes.

Robert Flaxman, president and CEO of Crown, spent five years redeveloping the former site of La Posada resort at the southeast corner of Lincoln Drive and Tatum Boulevard. The resort reopened to much fanfare in early November under the InterContinental brand.

The 34-acre resort features 253 guest rooms, 40 suites, five pools, 27,000 square feet of meeting space, two signature restaurants and a 31,000-square-foot spa.

The foreclosure action will not disrupt operations at the resort, according to Valeriano Antonioli, managing director of the Montelucia.

“It’s business as usual. The issuance of the notice does not in any way impact our ability to serve our guests or the operations of the resort. This is simply a legal matter between the owner and its lender,” Antonioli said.

Several weeks ago, another new high-end Valley hotel was served with a notice of foreclosure. The developers of the W Scottsdale were notified that their lender, HSN Nordbank AG, New York Branch, was foreclosing on that property because of a default on a $73 million loan.

Starwood Hotels & Resorts Worldwide Inc., the operator of the W brand, confirmed the hotel would continue to operate without disruption while the matter is sorted out.

Meanwhile, Flaxman also had planned to redevelop the Mountain Shadows Resort about a mile east of the Montelucia, but disclosed late last year that he had decided to sell the property. Last week, he announced he had negotiated a “binding memorandum of understanding” with Paradise Valley businessman Chris Haver and partner Dodd Mitchell to turn over the Mountain Shadows redevelopment process. No financial specifics were released.

                   Additional Story - Phoenix Biz Journal

Montelucia Grand Opening - November 6, 2008

	Robert Flaxman - Crown Realty President

Thursday's debut of the InterContinental Montelucia Resort and Spa had all the grand-opening basics - a red carpet, a parade of speakers and a ribbon cutting complete with large scissors.

But there also were twists and turns, literally, as a bevy of belly dancers, some eating fire, shook and shimmied as they welcomed guests and visitors to an exotic world tucked into Paradise Valley.

The 293-room resort at 4949 E. Lincoln Drive was built on the 34-acre site of the former La Posada Resort. Montelucia received its first guests Tuesday.

Montelucia is InterContinental's first resort in the United States and was built by California-based Crown Realty and Development Corp. Valeriano Antonioli is the resort's managing director. InterContinental has more than 150 resorts worldwide.

Robert Flaxman, Crown Realty president, incorporated the architecture and lifestyle of the Andalusia region of Spain and its historic influences from Roman, Greek and Moorish occupation into the resort's design.

He told those gathered Thursday that when he came to Paradise Valley in November 2003 and saw the property, he embarked on a five-year path that resulted in Montelucia.

"I truly believe that this property is one of a kind and the partnership created by the largest luxury hotel operators in the world and Montelucia is something, I believe, will elevate the entire tourism industry here in the state of Arizona," Flaxman said.

"We created it for love and for joy and for happiness, for people to come together and enjoy the moments of their lives and to spend lavishly in the process," he said.

State and local officials lauded the resort.

"This property just is absolutely what we want for the state of Arizona," said Margie Emmermann, executive director of the Arizona Office of Tourism.

Paradise Valley Mayor Vernon Parker wished the resort success and encouraged it to generate income. The town collects bed and sales taxes from its hospitality properties.

"This is a beautiful property and you are a part of this community. Welcome to the town of Paradise Valley. You are our neighbors," Parker said.

He and Jaime Sohacheski, Crown Realty chairman of the board, cut the gold ribbon.

Afterward, fitness and dance instructor and professional belly dancer Myryka Nunya performed to the live music of Incendio as a red curtain dropped and red-and-yellow balloons were released into the air, inviting those assembled into the courtyard.

Montelucia includes 253 guest rooms and 40 suites, including two presidential suites, 34 detached single-family villas, six restaurants and venues, a private wedding chapel, a 31,000-square-foot destination spa and salon, five pools, and more than 27,000 square feet of meeting and event space.

                   Opening Story - Arizona Republic

Additional Story

President Obama bucks Biltmore tradition by checking in to Montelucia

President Obama checking in to 'Lucy'

Obama's choice for his overnight stay was fitting; the hotel, open just three months, is already in foreclosure. The Phoenix area has been struck hard by the housing slump.

President Barack Obama's parade of change has come to Arizona, indeed. He's switching things up in the presidential boudoir.

Every American president since Herbert Hoover has stayed at the Arizona Biltmore Resort & Spa in Phoenix at least once while visiting the Valley.

For his first visit here, Obama chose to stay at the new InterContinental Montelucia Resort & Spa in Paradise Valley. Open just three months, the Montelucia is a $325 million Andalusian-inspired stunner that's already facing foreclosure.

The White House declined comment about why Obama is bucking Biltmore tradition, leaving a bare spot on the resort's beloved wall o' presidential pics. (We understand - we'd much rather the White House folks spent their time changing the world.) Perhaps Obama's staff found it apropos that the president could support a suffering business while on his economic-stimulus national tour. The lender backing the Montelucia began foreclosure proceedings this month.

Good news: The presidential suites at the Montelucia go for $3,000 to $4,000 per night, and the resort was fully booked Tuesday night with Obama's entourage and other guests. The president might help to get some bills paid. O-bam-a!

Montelucia's swanky chic

The 34-acre property sits on the corner of Tatum Boulevard and Lincoln Drive, and boasts a golf course, five pools, a swanky spa, and as many arches and pillars as the architect could imagine. It is definitely globally chic: a wedding chapel modeled after the Hotel Cipriani in Venice, Italy; a walkway modeled after the Alhambra in Granada, Spain, and a restaurant, Prado, that pays homage to Michelangelo's Villa San Michele in Tuscany. The special is paella for two.

There are two presidential suites, each over 2,800 square feet with just two bedrooms. The Andalusian presidential suite features a hand-painted ceiling, more columns, a canopy bed, and a private pool. The Camelback Presidential Suite has a glowing white bathtub that the stylish Michelle Obama would have loved.

The Montelucia has something else going for it: President Obama is a man of firsts, and the Montelucia is Intercontinental Hotels' first resort in the United States.

Biltmore bias?

Down the hill and west a few blocks, the Biltmore also has two presidential suites and much more history. Some of it might be a little too recent for Obama's liking. John and Cindy McCain spent time in the presidential pad before John McCain gave his concession speech to Obama on election night, which was broadcast live from the Biltmore lawn. Every time McCain said "Obama," the crowd booed, so perhaps the new president wasn't feeling welcome.

The McCains celebrated their wedding at the Biltmore in 1980, and live in a penthouse condo within walking distance of the resort.

Ironically, McCain is also hosting a fundraiser at the Montelucia on Tuesday night.

The Biltmore, which is celebrating its 80th anniversary this year, has confidence that Obama will eventually walk beneath the resort's famous gold-leafed ceiling and take his place on the photo wall with all the other Presidents, posing on the Biltmore's golf course or playing tennis on the resort's courts.

"We definitely would welcome President Obama and hope that he would want to stay at our resort and continue our legacy," said Julia Thorn, director of marketing communications for the Biltmore.

And Mr. President: here's a wallet-friendly travel tip: should the recession squeeze your travel budget, the presidential suites at the Biltmore are only $1,600 per night.

Original Story - Arizona Republic