More than 500 acres at former GM Proving Grounds in Mesa sold for $32M
Phoenix Business Journal by Kristena Hansen, Reporter
Date: Tuesday, November 27, 2012, 3:25pm MST
A local home builder and a New York-based private equity real estate fund recently handed over a combined $32.2 million to acquire 527 acres at the former GM Proving Grounds in east Mesa. That’s where the groundbreaking on about 1,550 active-adult and luxury homes is slated for early 2014, the companies said in a statement Tuesday afternoon.
More than half of the price tag — $18.6 million — was paid by Scottsdale-based AV Homes Inc. (NASDAQ: AVHI), which will control 310 of those acres. AV Homes plans to erect an active-adult community that will include about 1,000 homes.
Carl Mulac, executive vice president of AV Homes, said its housing product at Eastmark is still in the design phase, but the community will include a trail system rather than a golf course as initially planned because the surrounding area has many public courses. The groundbreaking is still pending entitlements from the city, but is tentatively planned for early 2014 with the first home closing expected by the end of that year, Mulac said.
“As the local home building industry continues to improve, we will be well positioned to serve active adults in two proven markets,” he said in the statement.
The remaining $13.6 million was paid by JEN Partners LLC, which has taken over the other 217 acres where it plans to sell about 550 luxury home sites to several home builders, the statement said. JEN Partners is currently in negotiations with several potential home builders, but their names were not disclosed. Construction of the luxury community is on the same time line as AV Home’s active-adult development.
Entitlement and land development activities will be managed by Phoenix-based TerraWest Management Co. LLC on behalf of AV Homes and JEN Partners.
“We are planning a community that will offer an exceptional lifestyle opportunity and luxury homes from some of the Valley’s most distinguished builders.” Jesberger said.
The 527-acre deal comes five months after DMB, master developer of Eastmark, sold about 700 home lots to seven local, international, public and private builders for $35 million. Those homes are on schedule to begin selling to the public following the grand opening of the Eastmark community in May.
Surrounded by Phoenix-Mesa Gateway Airport, three major freeways, and several employment cores and educational institutions, the Eastmark mixed-use community totals 3,200 acres at what once was the GM Proving Grounds. Eastmark has been in the works for several years as a means to boost and sustain economic growth in the southeast Valley; but, like nearly every other construction project in the region, it has struggled to gain momentum amid the recent recession.
While the residential aspect to Eastmark has recently gained momentum, the other major component — a resort and conference center — is on hold until DMB can find a developer to do the job. Initially, Gaylord Entertainment Inc. had agreements with the city and DMB to build the highly anticipated resort, but the company pulled the plug on those plans this summer when it announced it was getting out of the hotel development business entirely.