"Renderings and current construction photographs reflect a project substantially complete." That line comes from the sworn declaration Five Star Development filed in bankruptcy court in November 2025. The same filing described the hotel at Lincoln Drive and Scottsdale Road as being in its final construction phase. It said the luxury interior finishes were "ready to begin once court approvals are finalized." Eleven months later, the Phoenix Business Journal still describes the Ritz-Carlton hotel as incomplete. The plan filed in September 2026 no longer treats the project as one place. It treats it as a set of assets, and each one gets its own buyer and its own deadline.
That matters for anyone pricing a home near the site. For years, the 122-acre project was sold as a single picture. It was meant to be the first in the United States to put a new-build Ritz-Carlton resort, Ritz-Carlton-branded villas and estate homes, and a luxury retail district called The Palmeraie into one walkable setting. The plan, as filed, takes that picture apart.
Where Each Piece Is Headed
The Ritz Project debtors filed a joint liquidating plan on September 18, 2026. Under it, the remaining assets move into a plan trust, and the trust holds them, sells them and pays out the proceeds. The table below sets out how the filed plan, as summarized from the court record, treats each component.
| Component | What it is | Treatment under the proposed plan |
|---|---|---|
| The Ritz-Carlton, Paradise Valley | 215 rooms at 7000 East Lincoln Drive, split between 78 guestrooms and 137 casitas, plus restaurant, retail, meeting and ballroom space | To be marketed and sold under court-approved bidding procedures. Bidders must name an experienced hotel developer committed to finishing the property |
| Ritz-Carlton Villas | 80 branded villas in the 7000 East Lincoln Villas Condominium | Sales of remaining unsold villas continue. Net proceeds go solely to the construction lender, or villas may be transferred to the lender for a claim reduction |
| Palmeraie Scottsdale and Palmeraie Paradise Valley | Undeveloped land planned for the retail district | May be included in the hotel sale or sold later by the trustee, privately if that is judged to bring the most value |
| Ritz-Carlton estate lots | Undeveloped residential lots | Same trustee sale authority as the Palmeraie parcels |
The last two rows matter most to neighbors. After the plan's effective date, the trustee may market and sell the Palmeraie parcels and the estate lots "without court approval or other authorization." The trustee does not have to run an auction if a private sale would bring more value. The plan does carry the parcels' financial obligations forward. Property taxes and insurance are paid from trust funding, and the trustee may take on junior financing if needed. Nothing in that structure requires a future owner to build the district shown in the original renderings.
The original plan was ambitious. The developer described The Palmeraie as a fully entitled 29-acre district planned for about 160,000 square feet of luxury retail, dining and experiential space. It said multiple global luxury brands had signed leases or letters of intent. No filing in this research names those tenants. A FENDI label appears on a project illustration, and an illustration is not a lease.
Why the Hotel's Completion Rests on a Buyer Nobody Has Named
The easy assumption is that the new money in the case will finish the resort. The filings point the other way.
On September 14, 2026, the debtors asked the court to approve a replacement debtor-in-possession loan of $177.5 million from an affiliate or designee of Farallon Capital Management. The form of final order filed later put the commitment at $180 million. According to the form order, the money goes to:
- Repaying existing lenders Corebridge and B.H. Capital
- Closing costs, fees, expenses and reserves
- Administering the case and the affiliate needs in the approved budget
- Working capital and general corporate purposes
The list does not specifically set money aside for restarting construction or finishing the hotel. The motion also says Farallon would take no additional liens on the Ritz-related properties. The September 28 hearing agenda showed a revised order still marked "Forthcoming," so neither figure should be read as the final approved amount until an entered order confirms it.
Finishing the hotel is left to the sale process. Any qualified bidder must "identify an experienced hotel developer who is committing to complete development of the hotel Property," according to the proposed plan. The sale has to close within six months of the court approving the hotel bidding procedures. The debtors can extend that deadline twice, by six months each time. On paper, that window runs up to eighteen months after bidding procedures are approved, and the filings reviewed here do not show that those procedures have even been filed.
The opening date has been moving for some time. In March 2025, the Arizona Republic reported that Five Star expected the hotel to open in late fall 2025 or early spring 2026. A month later, around April 9, 2025, the construction lender declared a default and stopped funding the project, according to the debtors' chief restructuring officer. The Chapter 11 filing came on November 4, 2025.
The Price That Tells You Who Is Bidding
One number shows how the plan expects the ending to go. The plan gives holders of the parent company's equity an option to buy the hotel, its furnishings and the undeveloped real estate together. The price is no less than $570 million in cash. On top of that come the lender's allowed DIP and bonding claims and enough to pay general unsecured creditors in full. The plan then subtracts the $90 million credit already applied for the El Paso properties and any villa proceeds the lender has received. If that option is exercised on time, the marketing process ends and there is no auction.
That $570 million is close to the lender's agreed claim of $570,310,000 under the plan's term sheet. The underlying construction loan was a facility of up to $585 million dated May 11, 2023. In practice, the plan leaves two broad paths open. The current ownership group can buy the property back at roughly the debt level, or an outside buyer with a hotel developer can win it in a court-supervised sale. Either path puts the hotel and possibly the Palmeraie land under an owner who makes the next round of design and phasing decisions. The Phoenix Business Journal reported that the El Paso credit bid sale was approved on September 25. It also reported that Five Star Development and Madison Realty Capital, the lender, declined to comment.
What the Villa Sales Order Settled, and What It Didn't
Villa buyers got the clearest protection in the case. In December 2025, Five Star announced that the court had entered a Final Villa Sales Order. Under that order, liens, including mechanics' liens, attach to net sale proceeds rather than to the villas. The company said buyers receive federal good-faith purchaser status, and title insurers are authorized to issue clean title. Lance Miller, the chief restructuring officer, said the order "locks in clean, insurable title."
Title is one question. The finished setting around the villa is another. The villas were marketed with direct access to the hotel and retail district. The same December release said homeowners and residents continue to receive Ritz-Carlton-managed services and amenities. It did not name which amenities are operating. The declaration still listed the hotel's 16,000-square-foot spa and 400-foot pool, along with Mott 32 and Carbone, as features of a resort that will have them "once operational."
The court record also shows one contract dispute. Villa purchasers S. Frazier and Mary Bell asked the court to lift the stay so they could end an uncompleted purchase contract and recover their escrow. They alleged the villa had no certificate of occupancy and that their contract set a completion deadline of October 19, 2023. The motion was noticed for a March 5, 2026 hearing, and this research did not find a ruling. One contract does not describe every owner's position. It does show that the gap between closing and completion is the friction point in this market.
Inventory is less clear than it looks. The developer's November 2025 declaration called the 80 villas "fully pre-sold." By December, the company said it had released "a limited number of select Villas" after an initial sell-out. The September 2026 plan refers to completing sales of "remaining unsold villas."
The Calendar Through Year-End
Every date below is proposed or conditional:
- November 4, 2026. The Phoenix Business Journal reported that the plan would go to a vote on this date if a judge approves it.
- November 13, 2026. The DIP financing milestone for an approved plan and disclosure statement.
- December 18, 2026. The milestone for a confirmation order.
- December 31, 2026. The milestone deadline for the plan to become effective, on or before this date. The trustee's authority over the Palmeraie parcels and estate lots begins once the plan takes effect, which could happen sooner.
A proposed plan and a motion on solicitation procedures were filed on September 24 as docket entries 1058 and 1059. The filings reviewed here show no confirmation hearing date yet. The project has been in development in some form since 2008.
Questions Buyers Are Raising
Is the Ritz-Carlton Paradise Valley open to hotel guests? No source in the September 2026 record describes it as open. The Phoenix Business Journal calls the hotel incomplete, and the plan requires its buyer to bring a developer to finish it.
Does the new Farallon financing restart construction? The form of final order lists refinancing, case costs and working capital as uses and does not specifically fund construction. The final entered terms were not confirmed as of late September.
Who decides what gets built on the Palmeraie land? Under the proposed plan, the land may be sold with the hotel, or sold later by the plan trustee. After that, the buyer decides.
This is general information drawn from public court filings and reporting. It is not legal or financial advice, and anyone with a contract or ownership interest tied to the project should talk to their own counsel.
If you are pricing a home near Lincoln Drive and Scottsdale Road, or weighing one of the remaining Ritz-Carlton villas, the court calendar between now and year-end belongs in your decision. The senior partners at ROCO Luxury Homes follow this case alongside the Paradise Valley market and can go through how each scenario affects the property you are considering. Book a Private Consultation.
