The resort at Scottsdale Road and Lincoln Drive was supposed to come first. The villas, the estate homes and the shopping district around it were built to support it. Almost two years after construction stalled, that order has flipped. Homes are occupied and villa sales have court approval. The hotel is waiting for a buyer. The Palmeraie, the retail district many neighbors picture when they think of this corner, is at the back of the line. On December 15, 2026, a federal bankruptcy judge in Houston is set to consider a plan that would make that order official.
A deal that ran in reverse
The Town of Paradise Valley needed the resort finished so it could collect the tax revenue. AZBEX reported in November 2025 that the Town at first allowed the villas to be built partly to help fund construction of the hotel. That permission came with a condition: "substantial progress" on the resort. AZBEX reported that once hotel work stopped, the Town stopped issuing certificates of occupancy for the villas.
That trade explains why the project's parts now move at different speeds. In its first-day bankruptcy declaration, filed in November 2025, Five Star Development called the 122-acre project "largely completed." It said 44 villas had sold and several more were ready to close. The same filing says the project had been "substantially or entirely stalled since early 2025," when its senior lender, Madison Realty Capital, slowed and then stopped funding. Five Star blames the lender in that filing. AZBEX reported that Five Star also sued Madison, claiming money went into the villas instead of the resort. That diversion claim is Five Star's account, and the dispute with its lender is still part of the case.
A month after the filing, the residential side got a way forward. The Arizona Republic reported that the bankruptcy judge ruled in early December 2025 that villa sales could go ahead. Liens would attach to the sale proceeds, not to the homes, so villa owners could get clean, insurable title. The court gave the homes a path. The hotel did not get one.
What sits on the corner today
Five Star's filing describes three parts, and each one is at a different stage.
| Component | As planned | Status in the court record |
|---|---|---|
| The Ritz-Carlton, Paradise Valley Resort | 215 rooms, a 16,000-square-foot spa, a 400-foot pool, restaurants including Mott 32 and Carbone | Incomplete; to be sold under the proposed plan |
| Ritz-Carlton-branded residences | 80 villas and 32 estate homes | 44 villas sold as of November 2025; some estate homes occupied |
| The Palmeraie | 29 acres, about 160,000 square feet of retail, dining and experiential space | Planned; unnamed luxury brands with leases or letters of intent |
The villa count needs a careful read. The same declaration calls the 80 villas "fully pre-sold" and also says 44 had sold. The September 2026 plan expressly provides for unsold villas, which would go to a trust if they are still on hand.
None of the planned public venues is open: no restaurant, no shop, no hotel bar. Mott 32 and Carbone appear in the filing as future resort restaurants that would open once the hotel is running under The Ritz-Carlton Hotel Company, a Marriott subsidiary. If you have a reservation in mind for this corner, it depends on how the hotel sale goes.
The project's own pitch shows what is at stake for the Town. The filing calls the resort the first ground-up Ritz-Carlton resort built in more than 15 years. A project that rare is hard to replace if it stays unfinished.
A plan that ends in a sale
When Five Star filed for Chapter 11 on November 4, 2025, it said the case would help it finish the project. The Scottsdale Independent quoted founder Gerald C. Ayoub saying the process would provide "structure and transparency." The filing also stopped a foreclosure. AZBEX reported that Madison had moved to foreclose and that the property was set for auction that same month.
The plan that came out of the case points a different way. The joint plan filed September 18, 2026 is a liquidating plan. The remaining assets would go into a Plan Trust to be managed, sold and paid out. The developer would not keep building. Here is how the September version would work:
- The hotel goes to market. The resort and its furniture and equipment would be sold through court-approved bidding procedures under Section 363 of the Bankruptcy Code.
- Equity holders get the first option. They or their designees could buy the hotel for at least $570 million, plus certain claims and adjustments. If they don't use that option, the hotel would be marketed and auctioned.
- A buyer has to prove it can finish. A qualified buyer must name an experienced hotel developer and show where the money to complete the resort will come from.
- Villa money goes to the lender. Proceeds from villa sales go only to Madison under a separate agreement. The trust would get the hotel-sale proceeds, any unsold villas and the undeveloped land.
That $570 million floor is close to what the lender put in. AZBEX reported that Madison loaned Five Star $585 million in 2023 to finish the resort and residences. Any buyer at that price would also have to fund the rest of the construction on top of it.
The September plan names no hotel buyer. A revised liquidating plan was filed in mid-October, so the September terms may change before the hearing.
The dates that matter between now and December
The schedule has already moved once. In late September, the Phoenix Business Journal reported that a vote on the plan was set for November. A court filing on October 1 listed a November 18 confirmation hearing. The October 14 order replaced that date. Here is the timeline, using the case docket summary:
- November 4, 2025: Five Star affiliates file Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas, case 25-90607, before Judge Alfredo R. Perez.
- Early December 2025: The court clears villa sales with clean title.
- September 18, 2026: The joint liquidating plan for the Ritz project companies is filed.
- October 14, 2026: A solicitation order sends a revised liquidating plan out for creditor votes.
- December 15, 2026, 1 p.m.: The confirmation hearing in Courtroom 400 in Houston.
Confirmation would approve a sale process. It would not finish the resort. The court still has to approve a buyer, and that buyer then has to complete a hotel that, by Five Star's own account, has barely moved since early 2025.
Why The Palmeraie comes last
The Palmeraie is the 29-acre open-air district planned as a walkable extension of the hotel. It is approved for about 160,000 square feet of retail, dining and experiential space, plus later phases of branded condominiums and office space. Five Star's filing says several global luxury brands signed leases or letters of intent, but it names none of them.
Under the September plan, the undeveloped land is one more asset to sell. The debtors could bundle some or all of it with the hotel or sell it separately. That means the district's future could be decided by whoever buys the resort, or by a separate buyer with its own ideas for the land. The Phoenix Business Journal preview lists "land earmarked for a luxury shopping center" alongside the incomplete hotel and the unsold villas as the main issues the plan has to resolve.
The Palmeraie was designed around hotel guests and residents walking over from next door. A shopping district built to extend a resort is unlikely to open before the resort does. For neighbors waiting on new restaurants and shops along Scottsdale Road, the hotel sale comes first. No date has been set for the shopping district.
This post covers court filings and news reports for general information. It is not legal, tax or financial advice. If you have a contract or a claim connected to the project, confirm your situation with the right professional.
If you live near the corner, you're probably wondering how a sale on this scale could shape the area around it. That's a conversation I'm always glad to have, with a fifth-generation Arizona perspective and close attention to every update from the case. Visit Tanya Rhoades when you're ready. Let's Connect.
