City of Goodyear, Arizona
For Immediate Release: Nov. 5, 2008
Montage-Holdings faces Imminent foreclosure on 10,000 acres
planned for future development south of Estrella
(GOODYEAR, AZ) Goodyear officials have been informed by a consortium of lenders that foreclosure proceedings are imminent on Montage-Holdings, owner and developer of 10,000 acres in Goodyear’s Sonoran Valley. The lending group is expected to take over the property in 120 to 160 days.
The city negotiated several development agreements encumbering Montage’s 10,000 acres in the Mobile area which Goodyear annexed in March 2007. Montage was planning a “European style village concept” community called Amaranth, expected to grow to more than 200,000 people at build out.
Montage’s land was part of a 67-square-mile Sonoran Valley annexation by Goodyear that included 31,000 acres of open desert held by the BLM and 5,300 acres of state trust land. The annexation is considered significant as a future transportation corridor for the Loop 303, a potential industrial hub for Goodyear and for preservation of open space.
Goodyear’s annexation of Montage’s acreage meant that the 35 existing homes in the Mobile area would reap the benefit of Goodyear city services – police, fire and streets. Development agreements with Montage-Holdings made the developer liable for payments of all city services for seven years. Within a month of signing the agreements, Goodyear’s Fire Department had a fire engine and 24-hour fire and EMT coverage in Mobile. The City also entered into an agreement with the Maricopa County Sheriff’s Office to provide police coverage to the area.
However, with the gas and real estate crises, the credit crunch and the general downturn of the economy, development of Montage’s 10,000 acres stalled. No infrastructure improvements have been started since the annexation.
At an October 2008 City Council meeting, City Manager John F. Fischbach reported to City Council that Montage-Holdings was $1.1 million behind in their payments to the city for public safety services provided during the previous fiscal year. With this foreclosure, the shortfall for the current 2008-09 fiscal year will be an additional $2.5 million. These are shortfalls the city will have to absorb.
“Goodyear is looking to recoup those costs when development occurs and is currently exploring ways to continue public safety services to Mobile area residents in a more cost effective manner including potential service agreements with neighboring entities such as the Town of Maricopa and the Ak Chin community,” states Fischbach. “These residents are a part of our community and we will continue to serve them.”
The development agreements also call for Montage-Holdings to build a 15-mile, two-lane roadway to connect Mobile with Goodyear. An Environmental Impact Study (EIS) for the roadway, which could take two to three years to complete, is required by the Bureau of Land Management and is about 20 percent complete. Montage was obligated by agreement to pay the study’s $500,000 cost. However, in light of Montage’s forfeiture of their other payment obligations, in October 2008, Fischbach recommended to City Council that the City go forward with the EIS because the results would be good for years to come. The City will recover costs of the study when development occurs.
According to Goodyear’s city manager, “Having a completed EIS would allow construction to begin faster when economic conditions improve enough to warrant the road’s completion.”
Mobile residents have seen improvements to the roads in their residential areas and also to their school since the annexation. Montage has made renovations to the school and on October 25, Make a Difference Day, volunteers from Goodyear area Rotary Clubs painted the school’s main office and kitchen area, filled in an eroded water basin, built a shaded sandbox and donated books to the school.
The Sonora Valley is considered significant to Maricopa County’s future north-south transportation corridor for the future Loop 303 freeway which will eventually intersect with Interstate 8. Annexing this area, assured benefit to Goodyear from possible 303 freeway alignments and ensured quality development south of Estrella. The area is considered to have considerable potential as a future retail and employment center and economic engine for Goodyear. The current State Route 238, the current Union Pacific railroad and the future 303 freeway are likely to make Mobile a future transportation and industrial hub.