Original Article from the Prescott Daily Courier.
PRESCOTT VALLEY – Construction crews are turning dirt at the Quailwood subdivision here, four years after the former developer filed for bankruptcy.
Four model homes are under construction at the 987-lot subdivision off Highway 69 and Bradshaw Mountain Road, according to Jim Gunby, vice president for sales in Northern Arizona for Dorn Homes. Dorn is based in Green Valley.
“We have four models and six different floor plans,” Gunby said, adding that prices will range from around $140,000 to $200,000. The homes will contain two to five bedrooms, two to 2.5 bathrooms, and 1,312 to 2,272 square feet, Gunby said.
Gunby said Dorn is marketing the homes to multiple generations, including families and seniors. Dorn will open a sales office in the clubhouse Tuesday, and have a grand opening for its models June 30.
Dorn has emerged as the new developer four years after Empire Land of Ontario, Calif., filed for bankruptcy in 2008, citing the tightening or loss of financing.
Dorn has a close business relationship with Scottsdale-based Everest Holdings, which closed escrow April 30 on 371 finished lots in Quailwood for $3.2 million.
Everest clinched the deal with the Land Advisors Organization, which has had many suitors since 2009 for unbuilt lots at Quailwood here, according to Prescott-based agent Capri Barney.
However, every previous escrow fell through for a variety of reasons, including the complications of a community facilities district that financed public improvements, Barney said. Homeowners are currently paying $4.23 per every $100 in secondary assessed valuation into the CFD to pay off a $6.9 million bond issued in 2004, and that rate is likely to climb to $5.55 July 1.
However, Everest Holdings came through by buying 185 finished lots – including five homes – from the receiver for Prestige Homes (Wachovia Bank) and 186 finished lots from Central Pacific Bank and other banks. Everest also has the option of buying the remaining finished 186 lots, the Land Advisors Organization announced in a news release.
Land Advisors represented the receiver for Prestige Homes, and both the buyer and seller with Central Pacific Bank.
“You have to make a deal work,” Barney said. “Everest did a great job. They came in. They negotiated with the town.”
The deal is significant because a builder in a master-planned subdivision can start building homes, Town Manager Larry Tarkowski said Monday.
“It shows faith in that particular subdivision, and there is demand for the homes that will be constructed,” Tarkowski said. “So demand is rising. In addition to that, bringing back vitality to those communities will have the net effect of having property values slowly increase as the market rises.”
When the final transaction comes through, Everest will control a majority of the lots in Quailwood. Representatives from Everest, a real estate investment company, attended a meeting of the Town Council Jan. 5 in which they discussed the purchase of the lots in Quailwood. Everest officials also said they would sell the lots to Dorn Homes.
Everest also previously reached an agreement with town officials to help homeowners pay off $6.285 million remaining on the CFD bond issue. The bond, to be paid off in 25 years, financed a bridge across a wash near the entrance to Quailwood and for other public improvements.
Everest agreed to pay a maximum of $1 million into the CFD over the period in which Everest owns the lots, said Ryan O’Donovan, vice president of land acquisitions. He previously broke it down to $315 per lot per year that Everest owns the lots.
“We felt it was a good balance,” O’Donovan said.
Stacy Maule, who manages the homeowners association at Quailwood, was unavailable for comment.