Century Plaza Sued By Buyers

I just heard (this has not been 100% verified but the source is good enough that I feel safe in disclosing what you’re about to read) that several principals of Century Plaza are being sued by over twenty former buyers of these midtown Phoenix high rise condominiums. These twenty-some buyers are/were under contract to buy over thirty condos (i.e. some buyers were under contract for more than one unit each).

If this is true and over thirty units are at risk of not closing then it’s my bet that Century Plaza is in some REAL trouble.

Here’s why:

There are a total of 145 condominiums in the community. In roughly March or April I had been told by a sales person that approximately 80 of the condominiums were under contract. In early July construction was “completed” and the push was on to close the transactions. Since that time to the best of our knowledge only 14 buyers have actually closed on their purchases. So that means that less than 10% of the units have closed while double that number of contracts are at risk of falling through with the law suit. On top of that I have heard of at least four other buyers that want out and I’d be surprised if there aren’t a lot more. Afterall, you’d think that if someone wanted to close they would have done so over the last five+ months. I would bet that almost no one else of those eighty contracts has any real intention of closing but that’s a total guess.

And with all this going on, how many new buyers is Century Plaza likely to come up with?

I mean with fewer than 10% sold would you want to buy into a building if you knew other people are suing in order to get out of their deals? I would think most buyers would prefer to take the safer route of not closing now and waiting to see which direction things head. And if this happens I’ll bet that the lender is getting really impatient and worried. If the lender gets nervous and if the developer can’t make it’s payments (I’m not saying this is the case I’m simply hypothesizing right now) then its just a matter of time before the lender begins foreclosure proceedings. Now if the developer has plenty of money to pay the loan costs then that’s a whole nother story. We’ll see….

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22 Comments so far (Add 1 more)

  1. This is exactly what I needed, it countered some contradictions I had seen.

    1. Debt Consolidation Allentown on February 9th, 2010 at 7:05 pm

  2. NJC-Buyer got hammered and was treated totally and completely unfairly but not by Windsor Century Plaza or Equus Development… rather by the Bank’s Receiver who refused to refund his earnest deposit. This is a tragedy and I am stunned that M & I Bank allowed it to happen.

    2. CP Truth on August 9th, 2009 at 10:24 am

  3. I wrote a contract on contingency of selling my home, which did not sell. I was told my funds were completely refundable- now Century Plaza will not return them. Bad business practice. My advise is to stay away from this property and Equus Development.

    3. NJC- buyer on June 21st, 2009 at 9:29 am

  4. To Will Daly
    Will, you can go into the Superior Court, Maricopa County web site and review the technicial bankruptcy action by M&I Bank against Century Plaza. The other good source of info is the M&I Corp web site. Read the stockholders letters, SEC filing notices and the public accounting (public held company) info and balance sheets. A few more things from “Knowing the Truth”
    1.) M&I Bank does not want the developer to go into Chapter 11 bankruptcy action. The bank does not want to the facts of their actions before a judge. Given the attitude towards most banks, lenders in the court systems today, the bank would rather take the chances in a short sell or technicial bankruptcy which will allow them to write down the loan and regain some of the capital that they have lost.
    2.) If you go into M&I Corp websire and read “between the lines” of their stockholders new letters, they detail the condition of the bank and what the bank is trying to do. In short, the bank is in bad shape and they are “trying to right ship” Given there condition, that is somewhat like you and I trying to hold back Hoover Dam.
    3.) While in the M&I Corp website, look at their accounting on the balance sheet. Note the “Asset to Liquidity Ratio”. That ratio is less that 15% of total. Plainly put, when that number falls below 5%, the bank regulation people start action.
    There are other details involved, but they will follow in another entry.
    Knowing the Truth

    4. Knowing the Facts on February 22nd, 2009 at 12:48 pm

  5. Knowing the Facts – this is great information. Where did you get it? Any links to articles you can share?

    5. Will Daly on February 21st, 2009 at 11:46 pm

  6. Lets set the facts stright about Century Plaza Condos. First of all Century Plaza is a project of Equus Development. Equus has successfully complete numerous condo projects in Phoenix. The primary problem with the Century Plaza is M&I Bank. First, the developer was never in default or behind in their loan payments to M&I Bank. The loan contract had not matured and the developer had with the confines of the contract, requested the normal extension of the loan.
    The primary problem was M&I Bank. When the property values standed to nose dive, the bank demanded extra payments from the developer to close the ratio between the value of the loan and the property value. The developer did try to comply at various occassions to mainain the loan ratio as per the banks demands. At a point in November 2008, the developer could not support the wishes of M&I bank, the bank instituted “technicial bankruptcy” against the developer. For those of you who don’t understand the term, it means that M&I wanted their money early because of the finanical condition of the bank. The Century Plaza is currently under formal bid to sell the property.
    A few facts that should have the light of truth. First of all, M&I bamk is broke due to all of th “toxic loans” that they have on their books. Their condition is so bad that they can’t find anyone to buy them out. M&I bank has taken the same “technicial bankruptcy” action against nine other developers in the Phoenix area. Bottom line, M&I bank is broke and they are going down.
    The final item is the lawsuit by the potenitial buyers or shall we say it the right way,”speculators”. The speculators wanted to purchase the condo units in blocks to sell at a future date at a higher price. The american way. The problem hit again when the money markets fell apart and the lenders would not carry the loans. The lawsuit against the developer is simple. The speculator put down deposits for the puchase of the condo units. When they couldn’t get the funding from their lenders, they wanted their deposits back. The Century Plaza sales contracts clearly state the if you back out of the contract, you loose your deposit. The speculators took a risk and lost. Please understand that if you go to a craps table in Vegas and you roll the dice and lose, the casino doesn’t give you another roll. You lose.
    Equus Development will come back out of the technicial bankruptcy and they will complete the Century Plaza. Just wanted to the real facts and not the mis-information of some of the bloggers that can’t get it right. Watch in April or May for the next M&I bank action.
    Know the Facts

    6. Knowing the Facts on February 21st, 2009 at 10:09 pm

  7. Will Daly is the moderator of this blog (weknowurban.com), his number is at the top of this page.

    7. bystander on January 9th, 2009 at 8:34 am

  8. Who is Will Daley? That sounds good to me or we can meet somewhere like a Starbucks. In fact, 4:30 pm. tomorrow 7th ave and McDowell.

    8. Roland Peltier on January 8th, 2009 at 10:02 pm

  9. Hey, I suggest you guys (“spectator” and “roland peltier”) get in touch via Will Daly’s phone number and/or email on this website, and maybe he can facilitate you getting in touch. Hope this helps…

    9. bystander on January 8th, 2009 at 9:04 pm

  10. Ronald Peltier, I would prefer not to post my contact information. Do you have an email address?

    10. spectator on January 8th, 2009 at 1:23 pm

  11. Post contact @ and I will call you, Strength in numbers. RP

    11. Roland Peltier on January 8th, 2009 at 7:40 am

  12. post a contact # and I will call you. Strength in numbers. RP

    12. Roland Peltier on January 8th, 2009 at 7:34 am

  13. How do I get a hold of you Ronald Peltier so I can explain to you my situation with Century Plaza?

    13. spectator on January 6th, 2009 at 5:45 pm

  14. I Signed acontract over three years ago. The salesperson, Mike Web consistantly pushed the occupancy date untill the realestate market had changed so much that the origional numbers were completly out of touch with reality. I am interested in knowing if others are interested in a class action. I have an attorney and have been engaged in legal action for several months, however, as a group we would be far more powerful.

    14. Roland Peltier on January 5th, 2009 at 9:44 pm

  15. Unfortunately, even the best of projects can fail if the developer blows it with the buyers and the bank. I do agree there are lots of positive things about Century Plaza in general, not the least of which are the views, which are awesome and one of the main reasons we signed up for one. At some point all the dust will settle with the pre-construction buyers, at which point maybe you can buy a unit from some entity other than Equus, and it would indeed be a cool place to live.

    15. bystander on January 4th, 2009 at 8:28 pm

  16. Century Plaza is one of the most beautiful buildings in Phoenix, with some of the best views and the best location in town… I had the honor of recently touring the units and it’s a truly amazing building, and at the current prices and current loan rates of almost 4.5% at BofA with no additional fees, you’re looking at a pretty attractive place to live…. I like it a lot better than 44 Monroe, any of the Biltmore buildings, Scottsdale buildings, etc., etc… and it’s literally steps away from the Metro. I hope that everyone takes a more positive attitude towards this and other projects…. rather than attacking everyone all the time, we should come together as a community to try to make these projects a success.

    16. Ben Bethel on January 4th, 2009 at 5:07 pm

  17. My contract was signed roughly 3 years and 2 months ago. Previous to that when i made my lot reservation in April/May 2005 I was told by Equus that the build time would be roughly 18 – 24 months from lot reservation date. Also, in the earlier stages, at various times i would email the salesperson to get an updated time frame for completion, every single response would push the time frame back further and further……This was very frustrating considering the fact that I did intend to occupy this property (I AM NOT AN INVESTOR) as my primary residence and made temporary living arrangements in anticipation of moving into the property. Oustside of this, I did have my financing in place and spent money on an appraisal and other items in association with the loan….I was not jacking around! In the later stages when i did an inspection of the unit and they were trying to get me to close, there were some items that concerned me with regards to how ‘finished’ the unit was. I went back to Equus and asked for a mere 5% discount to compensate for interior items and a few other things. When I asked for this 5% discount they told me they had to ‘check into it’ and would get back with me……they messed around for 2.5 months without answering me, then finally said that they would go ahead and reduce the price slightly to make the deal work. By this time, my loan approval and appraisal expired and the loan underwriting guidlines changed so I no longer could qualify for a loan on a non-warrantable condo. During this time is when i started hearing news that elavators were not working and they did not have final Certs of Occ as well as other issues…….bottomline is that i loved this project and did not purchase to ‘flip’ or do anything like that, i purchased to live in. The developer was way off the mark with regards to the projects time frame both in what was written in the contract and told to me via verbal and electronic communication.

    17. Real Story on December 31st, 2008 at 5:51 pm

  18. The developer didn’t write unconditional contracts until 2006 and didn’t even start construction until summer of 2006. that equates to 2 to 2.5 years.

    18. CP Truth on December 28th, 2008 at 5:21 pm

  19. I think 4 years has been long enough to wait…..no one not investors or plain old residents will wait 4 years to move in,.,,,,i want out and yes i did buy something else in the interim……

    19. disgruntled buyer on December 25th, 2008 at 5:11 pm

  20. Century Plaza is a beautifully designed, well built building in a great location. It has extraordinary standard features, generous amenities and spectacular views that are the envy of its competitors.

    Unfortunately, there are certain INVESTORS who voluntarily failed to close escrow and are now speaking disparagingly about the property and its developer in the press and on multiple blogs – including, regrettably, this one. Their words speak as if from disgruntled ‘buyers’ but the truth is they are INVESTORS who never intended to close (even if they had the wherewithal to do so). Their self-described ‘class action lawsuit’ is nothing but an attempt to salvage earnest deposits after backing out of their contracts because they didn’t think they’d make a profit and the developer would bow to their demand to lower their already good price by 30%. They talk about “final inspections” and “C of O’s” and “unfinished units” but, in truth and in fact, the building and units are complete (with a final C of O) as evidenced by the multiple residents who actually closed escrow and have been living happily in the building for nearly six months. These investor’s lies and deceptions are nothing more than red herrings to promote their own agenda: get their money back and shed an unfavorable light on the developer and the building. Well… shame on them (and those who might promote them!).

    I encourage potential buyers – and the curious public – to personally see Century Plaza and listen to the praises from actual residents of the building. And I encourage you not to listen to deceptive vitriol from bitter investors with negative agendas who do not live there and, voluntarily, never will. Visit the community… talk to residents… see and decide for yourself. You’ll be glad you did!

    20. CP Truth on December 25th, 2008 at 9:24 am

  21. Century Plaza is a beautifully designed, well built building in a great location. It has extraordinary standard features, generous amenities and spectacular views that are the envy of its competitors.

    Unfortunately, there are certain investors who voluntarily failed to close escrow and are now speaking disparagingly about the property and its developer in the press and on multiple blogs – including, regrettably, this one. Their words speak as if from disgruntled ‘buyers’ but the truth is they are investors who never intended to close (even if they had the wherewithal to do so). Their self-described ‘class action lawsuit’ is nothing but an attempt to salvage earnest deposits after backing out of their contracts. They talk about “final inspections” and “C of O’s” and “unfinished units” but, in truth and in fact, the building and units are complete (with a final C of O) as evidenced by the multiple residents who actually closed escrow and have been living happily in the building for nearly six months. These investor’s lies and deceptions are nothing more than red herrings to promote their own agenda: get their money back and shed an unfavorable light on the developer and the building. Well… shame on them (and those who might promote them!).

    I encourage potential buyers – and the curious public – to personally see Century Plaza and listen to the praises from actual residents of the building. And I encourage you not to listen to deceptive vitriol from bitter investors with negative agendas who do not live there and, voluntarily, never will. Visit the community… talk to residents… see and decide for yourself. You’ll be glad you did!

    21. CP Truth on December 24th, 2008 at 9:24 pm

  22. Not only is Century Plaza being sued by buyers, they have also now been forced into receivership by M & I Bank (likely the first step towards foreclosure, but this has yet to be seen). They have apparently defaulted on a 42 MILLION dollar construction loan. The arrogant and pompous attitudes of Equus and principals, even now, is truly beyond belief. May they reap what they sow.

    22. bystander on December 23rd, 2008 at 10:20 pm

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