Ritz-Carlton villa owners back developer in PV resort dispute

Article originally posted on AZ Central on August 28, 2025

The developer of the long-belabored Ritz-Carlton Paradise Valley resort is “bound and determined” to finish the project, an attorney representing him said.

Five Star Development, led by Jerry Ayoub, sued Madison Realty Capital, the lender of a $585 million loan on the project, alleging that Madison’s actions have derailed the project, preventing further progress on the resort. Madison has started foreclosure proceedings on the property. The lawsuit was filed before Madison moved to foreclose on the development.

Portions of the project, including many of the villas, which are condo-style residential units, have been completed. But the resort, the centerpiece of the development, remains unfinished. The project began construction in 2018 and was expected at the time to open in 2020.

“Many of the villas got finished, but the hotel was still way behind,” Dan Brockett, an attorney with Quinn Emanuel who is representing Five Star in the suit, said. “Jerry believes, and we’ve alleged in this case, that this whole scenario is the result of Madison’s actions.”

In the suit, Ayoub’s team alleges the lender is attempting to “undermine and take over” the project, causing progress to stop and buyers to back out. The suit alleges that Madison prioritized development of the villas instead of the resort, leaving Five Star to be out of compliance with an agreement that had been made with Paradise Valley.

Representatives from Madison declined to comment on the case.

The town was more interested in the tax revenue to be generated by the hotel than in the construction of the villas, and the allowance of the villas had been a concession by the town to get the resort.

The town required “substantial progress” on the hotel as a condition of issuing certificates of occupancy for the villas, according to the lawsuit. Because the resort has not hit some of the required milestones, the town has stopped issuing certificates of occupancy for any more villas.

The agreement allowed the town to withhold certificates of occupancy, but not building permits, to both the villas and the estate homes on the site if the resort was not “substantially complete,” but did not define what milestones needed to be met.

The unissued permits halted the sale of 40 villas, according to the lawsuit, which would have generated $150 million in revenue.

Some villa owners defend Five Star

Some of the villas, however, are already sold and occupied. And for some of those owners, even though the process has been arduous, their faith is in Ayoub.

Steve Blamer moved into his villa right before Thanksgiving, and even though his move-in had been delayed, when the day came, it was worth it.

“The day you finally move in, you forget all of that,” he said of the long delays it had taken to get his unit. “It is a wonderful community.”

Blamer was quick to say that the process hadn’t been perfect and that Five Star had its issues, but said Ayoub has been communicative and proactive in working with buyers and has so far delivered a high level of service.

David Watson, another owner of a villa, said he would like to see Ayoub continue with the project, rather than see Madison take it over.

“I want to stay with the person I’ve gone to the dance with,” he said, adding that residents have not had any communication from Madison about the situation.

“Jerry has a vision, he has a level of quality and commitment,” Watson said of Ayoub.

Both Blamer and Watson said they are pleased with the attention to detail and quality Ayoub has brought to the project. But they acknowledged it is important that the whole project, especially the resort, comes to fruition.

“We need to get this hotel completed,” Watson said. “That is part of the dream we bought into here. So, it comes down to who can get it done. At least there is a guy who I know who cares about it and has a commitment to it.”

Watson called Madison’s prioritization of the villas over the resort a “squeeze play” that set Ayoub and Five Star up to fail.

“At the end of the day, I just want this stuff finished,” he said. “I’d like Jerry to do it, but if he doesn’t have the capacity, that’s okay, but he hasn’t said that he doesn’t have the capacity.”

Blamer agreed and said it is important the development gets built in the best and fastest manner possible.

“The point is (Ayoub) has a vision and he needs the chance to finish it,” Blamer said.

Brockett, Ayoub’s attorney, said there has been discussion between Madison and Five Star, but declined to provide details.

The trustee sale for the property was scheduled for Nov. 12, according to Maricopa County documents. Both parties have until the last business day before the sale to file an objection and obtain a court order to stop the sale.

Brockett said Ayoub feels like he has been wronged in the process.

“He is the one who originally had the vision of this, his commitment to the project is unwavering,” he said. “He doesn’t believe a predatory lender from New York should get in the way.”