Concrete Bungle: Tempe’s Twin-Towers Condo Project Collapses Financially, Leaving Investors in the Rubble

The lofty Centerpoint Condominium towers broke ground in 2005 and were supposed to give downtown Tempe its own slice of Manhattan.

Four years later, they've delivered just that — except the slice resembles something out of the film Escape from New York. Not quite the Chamber of Commerce's dream.

The almost-completed 22- and 30-story buildings at Sixth Street and Maple Avenue are dark, shiny hulks at night — tombstones for the Phoenix area's devastated real estate market.

Without air-conditioning, the interiors roast at 190 degrees in the summer heat. And since construction stopped in July 2008, the towers have been a playground for drunken trespassers and transients.

Not so long ago, condominium agents were taking prospective residents into the towers to pitch the units. Prices started at about $300,000 and soared to more than a million for the spacious penthouses. The lowest-priced units were just 600 square feet or less — but what a view!

Nowadays, a different kind of visitor is enjoying the scenic vista. People like . . . We'll call him Dave.

On a warm evening in May, head buzzing from numerous rounds of alcohol consumed while barhopping on Mill Avenue, the young man prepared to relieve himself from the roof of the tallest building in the East Valley.

To fulfill his ill-considered plan, he realized he'd need the help of two friends — and they agreed to hold his arms tightly while he hung his butt over the side of the low, concrete wall.

"We were pretty drunk," says Dave.

After climbing the spooky, silent stairwell of the largest tower, the three buddies were now partying at more than 330 feet. Creepily, the rooftop glowed red from the large, blinking aviation-warning lights. Far below were the lights outlining the two bridges over Town Lake, the light-rail bridge and the Loop 202 freeway; the galaxy of Phoenix extended out to the horizon.

The trio saw evidence of the many trespassers who had come before them. Beer bottles lined the rooftop's edge; more bottles and dozens of cigarette butts were also strewn across the roof.

Dave sat on the wall — and was overcome by a wave of good sense. His friends were laughing so hard that he figured they'd drop him. He abandoned the college-boy idea.

The team decided to explore their environs on the way down, checking out the half-built condo units of the north tower. Wood floors and countertops had been installed in some units. Slabs of uncut granite, dry wall, and other raw material "were everywhere," he says. They ventured onto balconies that were bordered only by rickety two-by-fours, but the place didn't seem too dangerous. So, a few weeks later, Dave brought a couple more of his friends to the towers for a romp.

This time, the door they had used on the third floor of the parking garage was locked. A security guard in a truck rolled up as they looked for another entrance. He forced them to leave the garage and jump back over the chain-link fence. Because the guard was "so cool" they came back in moments later, only to be nabbed by the same guy. They had judged him right — the guard had no interest in busting anyone and merely told them once again to scram.

"He said he catches kids up there all the time," Dave says.

It's not just "kids," though. The buildings — expected at one time to be worth more than a quarter-billion dollars upon completion — have become a hangout for transients, too.

The trespassing free-for-all led Tempe's development services director, Chris Anaradian, to fire off a bluntly worded e-mail on June 3 to one of the developing company's principals, Ken Losch.

"Heads up, guys . . . The Tempe Police Department is sending officers over to Development Services today. They want to understand how we can pressure you to mitigate the large numbers of trespassers who are routinely entering the empty buildings at Centerpoint," Anaradian wrote. "Evidently, the upper floors of the project have been routinely trespassed by our local homeless population."

The problem is challenging. Losch's bankrupt company is existing on emergency funds, and security is expensive.


The Centerpoint condo project was supposed to open its first tower in spring 2008, along with first-floor retail shops. The taller tower was to open a few months after that.

From the beginning, the project was designed to be over-the-top.

The initial plan called for four high-rises with 800 units. The project was later broken up into two phases, the first consisting of two towers and 375 units.

A 23,000-square-foot common area on a seventh-floor "backyard" connecting the towers was to feature a white-sand beach next to a pool, a kitchen with on-duty chef, a wine lounge, an "electronic lounge" with large-screen TVs and video games, a spa, a gym, and concierge services.

On the first floor, residents and the public would be treated to a gourmet grocery store with coffee drinks and gelato, a bakery, and other shops. A new Italian restaurant was to be built in partnership with one of the Valley's top chefs, Michael de Maria. The Trattoria M was to be equipped with a "wine aficionado room" and private "chef's table" room, plus a casual dining area. (De Maria, who closed his Michael's at the Citadel restaurant in Scottsdale two years ago to focus on Centerpoint, did not return calls for this article).

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  • David Dewar 01/30/2012 12:45:00 AM

    Advanced Green Technologies is Ken Losch's new scam. Nobody do business with Ken, he will steal your money. He has the brain of a evil masochist and terrible things will happen to you if you let him trick you. Trust your instinct and get as far away from him as possible. Heed this warning.

  • Jaime Dawson 01/30/2012 12:39:00 AM

    I wish I could start an I hate Ken Losch club. How many members would join? He is now doing some new business scam I am sure! I can't wait for him to go to jail and go to hell. He is a German nazi. If you ever make the mistake of getting caught up with anything to do with him- RUN!!!! You will thank me later!

  • John 10/19/2011 8:54:00 PM

    Ken is not a genius, he is a horrible, horrible man. He tries to gain power through scam and does it all because he is ugly, short, with bulging eyes and a loser. Don't buy the hype! Move back to Canada Kenny, America hates you!

  • Kensucks 10/04/2011 4:17:00 PM

    So it looks like Mr. Smithers (Ken Losch) got married to Lori Losch. I am so tired of Ken trying to put up the appearance that he is a philanthropist and enlightened. He is a thief who will steal and manipulate anyone he comes in contact with. Pay back the people who lost money on your BS Centerpoint project! Anyone who is considering doing business with Ken- please don't make that mistake. He only thinks about himself and is an evil narcissist. That poor girl that married him must be a brainless idiot to join the Losch brainwashing cult.

  • Suzanj 07/05/2011 8:06:00 PM

    I google "Ken Losch prison" occasionally to see if he is in jail yet. He is so corrupt and evil. He steals from all he comes in contact with and tries to sell them to get money from them so he can buy himself fancy planes, race cars and tramps. Do tell what the trick was Ernesto? I want to start a "Send Ken Losch to Prison" petition. Why isn't he in jail? He stole from every person and business at centerpoint and Magellan. Let his partners in crime be known and named- Brian Snider, Andrea Maw, David Dewar, Jamie Dawson--- You are all a bunch of thieves!!!!!

  • Ernesto 10/20/2010 9:08:00 PM

    Well, I have known Ken L. in the eighties. And this story doesn't surprise me. He wasn't rich then, but had successfully squandered colleagues investments - out of greed or incompetence? I dont know, may be both... but I played him a trick back a few years later so we are even...;-)

  • Jane 07/09/2010 9:09:00 PM

    You are 100% correct Justin. When are they going to be prosecuted? Ken Losch and his whole family should be deported. Let them steal from their own country and leave the US alone. They have nothing legit or positive to add to the US. Ken is the ugliest person I've ever met- inside and out. I can't decide which is more horrid....

  • Justin Xen 06/17/2010 5:58:00 AM

    Appears to be another Ken Losch disaster. This man has a massive ego, larger than the towers that the Twin Towers (not a good choice of name little Kenny)that he attempted to build. He and his egomaniac sister Andrea appear to have a history of ripping of investors and breaking the law in Canada. Perhaps it's no wonder they they relocated to Arizona after fleecing hundreds of Canadian investors of millions of dollars in the 1990's under an entity called Magellan Development.

  • Kathryn McElroy 04/24/2010 2:43:00 PM

    That's Phoenix for you.The city would rather have a skeleton of a structure empty, saluting absolute greed in the night sky, than have it be a haven for homeless people.

  • seattle condos 03/23/2010 12:22:00 PM

    Just like any other parts of the USA, Seattle real estate market fared pretty well till 2006. During recession, the market got somewhat slow, but never came to a dead stop. While sales of brand new luxury condos slowed down, resale condos fared a little better than their brand new counterparts

  • -K 11/04/2009 9:52:00 AM

    Everyone feels sorry for the investors, and i get it, but to invest in a company like MTG LTD you are suppose to be an accredited investor and aware of the high risk What about the employees of MTG LTD? The receptionist, admin. clerks etc. Who's 401 k money won't be paid back and due to management left, isn't even included in the bankruptcy proceedings.

  • Gentle Strength Co-op Member 11/02/2009 8:54:00 PM

    Regarding the idea of Gentle Strength Food Cooperative, Inc. taking over the Centerpoint project - just had a brainstorm! The government will soon have billions of dollars available for stimulus projects and specifically for health care co-operatives. It would be so cool if the community came together, purchased the property and converted the whole thing into an Hospital Campus with an emphasis on practicing preventative medicine. That's basically what the Gentle Strength Food Co-operative ran - a whole body medicinal herb and food healing center. Talking to the people who ran the herb dept. was like going to a doctor. They would tell a person exactly what might be recommended by respected tomes in the arena of herbal healing and health living. It would be a large feat but I think that downtown Tempe could really use a hospital. Of course we'd make room for a health food store on the site that would serve as a herbalist, grocer and pharmacist for the hospital complex. Imagine, a large medical campus, training doctors and nurses from ASU and local naturapathy schools, providing affordable health care and health lifestyle guidance to the local commnity ALL owned by members of our community here. It's a possibility. Let's see if the Chairman of the Board of Gentle Strength Co-op is willing to do his fiduciary duty and call a general membership meeting to decide this. I'm guessing the money received by the Co-op to start this venture (Co-op Health Insurance Company) would also include a payment to the various entities that we owe money to for full settlement of their claims.

  • James 10/22/2009 4:07:00 PM

    I have been watching the Centerpoint saga since it first started. I was excited when they annouced not 1 but 2 towers just off Mill. I am Centerpoint's target market. I dislike the suburbs, I hate yard work, I'd rather walk than drive. When I heard what the price point was plus the high association fee, I was sure this was going to be a disaster. Still I went and looked at them. Sure enough the agents bragged about the amenities and location-location-location. When we got to the prices they focused on the value appriciating. I got the "you must buy now, before they sell out." hustle and I considered, against my better judgement to put a deposit down. Then I saw a news magazine about the Miami and Las Vegas highrise condo market starting to cool. I thought maybe in a few months the prices will come down, so I waited. What came down was the developer and the lender. Boy, did I dodge a bullet! I finally got my urban condo, at a fraction of the pre-recession prices, in a Central Phoenix complex built in the 60s just blocks from the vacant Cheauteaux On Central site. Now I search for any news about Centerpoint, Mosaic and Elevation Chandler. Their unfolding drama has become a morbid kind of entertainment for me, a guilty pleasure. I hope the project is able to be completed. I hope it does all it has promised for Downtown Tempe. But for the time being this is like great TV. I'll smirk every setback with an "I told you so" accent and cheer if/when they finally open.

  • Don M. 10/22/2009 8:00:00 AM

    Geoff, A. You do seem quite ignorant and aren't as knowledgable as you think. Very misinformed and easily swayed by propaganda- just another losch casuality! B. Avenue was already upside down on centerpoint before mortgages limited came into the picture. Why do you think Ken signed on for such a high risk loan? Too bad he was overleveraged and recklessly gambling with other peoples money and the city of tempes future. C. Have you been to Africa to confirm Avenue kept their promises? They didn't even keep their promises to people close to them. This one is a no brainer and you are naive. D. As for Scott, basically 2 crooks joining aligances out of necessity and greed with little options. E. Get a clue Geoff, maybe the losches will have a new development/scheme to steal your money that you might be interested in. You sound like their type of buyer! Hope that helps : )

  • Geoff S. 10/21/2009 9:53:00 PM

    If that is your response, then sadly you have NO idea what you are talking about...Along with the other posts and the terrible terrible Author Mr. Stern!

  • Jack Swift 10/21/2009 8:20:00 PM

    Geoff, you're the one who looks retarded, plus in on the scam.

  • Geoff S. 10/21/2009 4:54:00 AM

    From what I can gather, all this seems too emotional. Anyone with half a brain can do some research online and figure out that: A. Mortgages Limited (and Radical Bunny) stopped paying Avenue Communities before Avenue Communities owed them a penny. you can even see that almost all the developers that Scott was funding sued him for not paying. B. If you have been around this town for awhile you would know that Scott and Ken where good friends, in fact, I heard that Ken did not take the lender to court when they defaulted because of this relationship. why would he kill himself because of one of many bad projects? doesnt make any sense. C. I dont know what this ex employee is talking about but the Africa foundation is actually real and doing very well... You can google it and find a lot of information. and finally D. Do you think Tempe is the only city in the world that has projects like this one? this is a global recession of the likes we have never seen in most peoples life times. I dont know about you but I along with many family and friends cannot get the desired jobs we all are educated for. this whole thing really sucks. Dont take the word of some Ex employee as fact, there is a reason that the person is a former employee hahaha probably got fired for a good reason. Also, If I was the author of this I would feel completely embarrassed for using information pertaining the Scott and his family about his tragic lose. Not to mention his lack of true information and understanding of the real-estate business makes him look simply retarded. I just hope this real estate mess ends soon so we can all get back to worrying about things that really matter.

  • meow meow 10/18/2009 1:58:00 AM

    I love it.. "imagine for a second that they sell all the condos at $300k each" try $75k max. The AVERAGE condo price in vegas is now $66k (and dropping like a rock) Mish: FHA Rules Render Condos Utterly Worthless (google "mike shedlock" if the link is broken) http://globaleconomicanalysis.blogspot.com/2009/10/fha-rules-render-condos-utterly.html

  • chris Long 10/17/2009 2:48:00 AM

    So, like, where are the headlines in the RAG about this ? The Fat Cats that were supposed to make the Big Bucks off those towers already cashed in and skipped... Guess who gets to bail out the development, suckers ? Wasn't Town Pond the biggest Trojan Horse since Troy ?

  • Jessica Jordan 10/17/2009 12:09:00 AM

    Thank you New Time for writing about this issue again. Being directly affected by the development in 2005, I have been talking about his BS for years. Down Town Tempe is now a big hunk of swiss cheese. I personally, will be holding a demolition party out front of Wet Paint Art Supply the day they push the button. Also, the co-op was a shame to loose. It was a huge scam! I hope to see that land utilized as a park until they decide to build something.

  • Chris Long 10/16/2009 10:11:00 PM

    Hey, we all know the faux "valley" is just one more high-rise, mall, rail scam etc. away from perfection, right ? The denouement will be people flocking from eastern cities and the south to live in a "world-class" place, eh ? Then they can all sit around in the blast-furnace heat and all say, "Gee, isn't this overcrowded, overdeveloped place great ?" After all these years, how can rapacious developers STILL sucker so may people ? After they get their buck, they're gone ! Little people like us then live in the urban wasteland. Whatever happened to the world's tallest building scam for Phx ?

  • Gentle Strength Co-op Member 10/16/2009 4:53:00 PM

    Gentle Strength Co-op is still a legal entity and is being sued due to the malfeasance of the last board of directors' decisions to deviate from a relocation plan put in place by a previous board (and some serious conflict of interest issues on the part of some of the board members). The sale of the old Coyote bar location (University & Ash) was not forced but a deliberate (and faulty in my opinion - Whole Foods had agreed to enter that location and they have a large department that studies locations) decision to try to increase sales. I think that Gentle Strength should call a membership meeting, elect a new board (the old one has abandoned their fiduciary duties), and apply for a large loan from the government to buy the project from the City of Tempe (after they acquire it through imminent domain) and complete the build out, making it a Housing Co-op with a food store and shops underneath. I'm guessing there's something in the stimulus plan which would help with this. The Co-op could even assume qualities of Salt River Project (a quasi-governmental sanctioned independent business) which would be run and owned by the members but overseen by the federal government. This would prevent the problems experienced by our members caused by the prior board of directors and force compliance with local open-meeting laws. This way the creditors could be paid off, the community (not the City) could assume the risks under co-op ownership and downtown Tempe would not be saddled with this big empty eyesore for the next 20 years. BTW - THe creditors of the present Co-op are really only fighting over a few thousand dollars so those cases could be settled relatively quickly with an infusion of stimulus dollar loans and grants from the federal government. PS: Terry Goddard used to run the HUD Office that oversees implementation and operation of federal rural housing co-ops and might take the lead in this or at least help out a little. In retrospect, it would be better to have Gentle Strength Co-op (a proven independent business model with over 30 years of experience) owning and runing Centerpoint as a Housing Co-op providing low-cost quality housing to the downtown Tempe community than having these rapacious financial investor types crash and burn the project over and over again for the next 20 years.

  • Ridiculous 10/15/2009 11:39:00 PM

    They're right. Just because you don't think it's pertinent doesn't mean that they're not asking a germane question. The Co-op's old location was torn down for centerpoint, as was the old Tempe Bicycle building... There was supposed to be a Whole Foods going in in the spot. On the bright side, the co-op has apparently resurfaced in some shape... across the street next to the tracks.

  • Duh 10/15/2009 9:55:00 PM

    What does co-op gentle strength have to do with Centerpoint Condominiums? You need to just update your facebook status with that comment and stay on topic...

  • Gentle Strength Co-op Member 10/15/2009 9:45:00 PM

    We need a follow up on the old Gentle Strength Co-op property at University and Ash also. What's going on there?

  • Ex-Centerpoint employee 10/15/2009 9:28:00 PM

    I used to work for Avenue Communities and that company is such a scam. Centerpoint was misrepresented to potential buyers from the very beginning and Ken Losch was a driving force in the deception. We were directed to use certain wording to make the project sound less risky to buyers, they lied about the sold homes (by putting employee names, old investors that were no longer recent) so the percentage sold/reserved was higher. It was intentional and Ken Losch is a con artist that belongs behind bars for money laundering and fraud. It is tragic that he also caused Mr. Cole's death, there is no doubt in my mind that Ken provoked him to commit suicide. Money has always been mismanaged within this company and passed from one LLC to the next to settle debt temporarily. Ken and the executive team has always been overpaid, this greed has ensured their dishonesty. Ask the Vice President, Brian Snider about the backwards finances. The Losches need to move back to Canada and quite stealing from Americans and ruining our cities. That includes his evil sister Andrea Maw (the old Sales Manager for Centerpoint Condominiums). Their most abused currency- people's hope and trust. Question: with all of the debt that Ken Losch has amassed, all of the home owners/investors money that he has squandered--- How can he still be living an extravagant race car lifestyle when he's caused nothing but havoc all around him and has placed so many people in debt? I'd bet that he has hidden money in an LLC or overseas. He is so incredibly conniving and evil. Ken Losch directed for HOA budgets to be temporarily subsidized by the company to make the monthly fees less and more attractive to buyers and promised the world with little reality attached. They brainwashed their employees and underpaid and overworked them. Verbally tearing people down was commonplace there. Avenue communities has a fake charity in Africa that they pretend to support for positive public appearances. They also developed an illegal lease-back program for Center point units with the intent to lure uneducated investors. They have a similar lease-back program to this at the Lofts at Grayhawk and none of the home owners were receiving their owed payments. This company capitalized on peoples weaknesses. I'm glad that an article was written to finally shed light on the corruption of Ken Losch and Avenue Communities. We didn't learn with Magellan but hopefully Tempe will keep Ken Losch accountable. Eventually, the house of cards must fall and people (investors, the city, buyers, the courts) will stop drinking the Koolaid.

  • Dfactor 10/15/2009 5:03:00 PM

    Whew! Heck of a story - great reporting. Stunning lack of foresight by all principals involved in this mess. Is the recession over yet?

 
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