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

This summer was even hotter.

The developers and their employees testified that rain hasn't yet penetrated the towers, but the buildings aren't entirely sealed. It may take luck to avoid a mold invasion like that at the Brickyard during its construction phase, resulting in an $11 million remediation.

Photos by Jamie Peachey

The unfinished state of the Centerpoint towers is obvious when you get close to them.

Details

Concrete Bungle in Photos

Also see: Phoenix Interrupted: Downtown’s Full of Gleaming Progress Surrounded by Vacant Lots – Now What?

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• Tempe (Arizona)
• Phoenix (Arizona)
• Scott Coles
• David Dewar
• Property Values

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If a super-investor were to swoop in with the $75 million needed to get the Centerpoint project going again, city officials say building permits are still active, that inspectors stand ready to examine each completed task by workers; fees are deferred until the project is done.

If that were to happen, in a few months, condo buyers could be moving in, they say. The towers would once again look like Tempe's crown jewels — instead of symbols of the failed economy.

Jay Novak, 31, a home-theater installer (and son of Phoenix attorney Ed Novak) had hoped to be one of those new residents. He was one of about 40 people who paid up-front earnest money for one of the condo units.

It's frustrating, he says, because his condo on the 12th floor of the shorter tower appeared finished to him. The last time he went inside, about the beginning of 2008, even the appliances were installed. He wonders how they've fared in the blistering heat. But he figures it's not really his problem anymore.

He doesn't expect to see his $50,000 down payment again. The condo contract stated that the deposit money would go into a "non-neutral" escrow account and would become the developing company's property if something happened, he says.

"It's in big, bold letters — and we all signed off on it," Novak says of he and the other buyers. "There's no way I'll get my money back."

When he's ready to buy another home, he says, he'll get something more traditional. But if the next owner of the condo towers is willing to reimburse his loss and cut him a deal on a nice one-bedroom, well, it all depends on the price.

Such is the case with the entire project.

Karl Guntermann, a real estate expert at the W.P. Carey School of Business at ASU, expects the project to be finished and the condos sold — even if it takes a few years and becomes a major loss to the original players.

"Real estate is what happens when someone takes advantage of someone else's misfortune," Guntermann quips.

"Tempe wins, regardless of what happens," the professor adds. "At some point, Tempe's going to have a whole lot of real estate on the tax rolls."

Anaradian, Tempe's development director, agrees that the city's long-term future looks bright, despite the setback of Centerpoint. He challenges his staff to step into a metaphorical time machine and travel 15 years into the future to see what the city will look like.

For now, though, we're all forced to stare at evidence of the bleak present: the dark, unfinished towers of Centerpoint.