What’s Going on with the Paradise Valley Ritz-Carlton?

Craig OuthierApril 23, 2021
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Alleged defects, delays fuel spat with contractor.

With 108 luxury hotels and resorts in 30 countries, the Ritz-Carlton Hotel Company is known as one of the world’s most illustrious hospitality brands.

Evidently, “construction defects” are not part of its formula for success – and particularly not in Paradise Valley.

Legal documents filed this week in Maricopa County Superior Court reveal behind-the-scenes rancor between the owner and former contractor of the long-delayed Ritz Carlton, Paradise Valley resort and its adjacent residential development, Ritz Carlton Villas.

On April 14, Scottsdale-based Five Star Resort Owner LLC, which is developing the property under the aegis of Ritz-Carlton, filed suit against Utah-based Layton Construction Co. and two other contractors, citing the construction concerns quoted above, along with the claim that “defendants failed to complete two construction projects, the Ritz Carlton Hotel Project and the Ritz Carlton Villas Project, in a timely and workmanlike manner.”

Two days later, Layton Construction filed a $29.4 million countersuit, citing “collections on unpaid construction services and mechanic’s lien foreclosure.”

No dollar figure was indicated in the initial lawsuit.

Part of a planned $2 billion, 122-acre master planned community called The Palmeraie, the 215-room Ritz Carlton, Paradise Valley made waves in the local hospitality industry when the project was announced in 2016. Resting on 20 acres of “lush, cooling landscape” west of Scottsdale Road along the north side of Lincoln Avenue, the project anticipated “a stunning grand lobby, situated above the rest of the hotel overlooking the iconic Camelback Mountain, [that] will greet guests with a water feature that cascades down through the property to a world-class spa,” according to a 2019 press release.

The resort was originally scheduled to open in summer 2020, but the COVID-19 pandemic – and construction issues, evidently – stymied its debut. The projected completion date was pushed to first quarter 2021, and then again to fall 2022.

Quoted in the industry journal Engineering News-Record in late March, Five Star chief financial officer David Humphreys indicated the company fired Layton in December “due to [Layton’s] failure to meet performance and execution expectations.”

Earlier, Layton issued its own statement, justifying the impending lawsuit: “This is not the ending we were expecting or hoping for… Unfortunately, we had no choice considering the millions of dollars long overdue and unpaid, despite repeated pleas to Five Star Resort Owner to pay the many local businesses and hard-working men and women who worked tirelessly, despite the constant threat of the COVID-19 pandemic, to build Five Star’s project.”

In February of this year, Five Star brought on PWI Construction, Inc. as general contractor, to carry their hobbled $2 billion project across the finish line.

But it appears eager Valley staycationers will have to wait until autumn 2022 at the earliest to put on the Ritz.

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