By Brandon Brown | Phoenix Business Journal
The developer behind a $2 billion, 122-acre master-planned community in Paradise Valley has filed a lawsuit, alleging in court documents that the town is trying to “shake down” the company for millions of dollars.
Five Star Development, which is building the Palmeraie luxury community and accompanying Ritz-Carlton, Paradise Valley, filed the lawsuit in Arizona Superior Court on June 25.
“This is a shakedown, pure and simple,” Five Star Development President Jerry Ayoub said in a statement. “The Paradise Valley Town Council is sorely mistaken if it thinks it can rip up our development agreement and squeeze us for millions of dollars in bogus fees and charges just so Town Hall can paper over its budget shortfall.”
Like most municipalities, Paradise Valley has seen operating revenue drop significantly due to the COVID-19 pandemic. The town is looking at an estimated 40% decrease in revenue and a potential $10 million reduction to its general fund, according to town documents.
The dispute is over whether Five Star is responsible for paying for underground storm drainage structures in public streets and some other payments the town has asked Five Star to pay.
Paradise Valley officials have not yet responded to a request for comment on the lawsuit.
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