CityNorth Developer Faces $290M Foreclosure

PHOENIX-In what is dubbed the largest foreclosure proceeding in the state, Capmark Finance Inc. filed papers in Maricopa County Court against against CityNorth developer Klutznick Co. and its partners. The Phoenix Business Journal reports Capmark claims it’s owed more than $290 million for the 627,000-square-foot first phase of the mixed-use project, which opened in late 2008.

The Business Journal says the foreclosure targets the so-called “High Street” companies of the 5.5-million-square-foot project’s first phase at Loop 101 and Tatum Boulevard. The entire development is a joint venture between the Related Cos. LP, Thomas J. Klutznick Co. and JER Real Estate Partners.

The first phase broke ground in 2006 when Nordstrom agreed to sign as the project’s anchor tenant. However, the Business Journal says the crumbling economy forced Nordstrom to pull out of the project. The two other first-phase retailers, Macy’s and Bloomingdales, have pushed their openings back until 2010.