Phoenix Business Journal$290 million

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The Business Journal says the foreclosure targets the so-called"High Street" companies of the 5.5-million-square-foot project'sfirst phase at Loop 101 and Tatum Boulevard. The entire developmentis a joint venture between the Related Cos. LP, Thomas J. KlutznickCo. and JER Real Estate Partners.

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The first phase broke ground in 2006 when Nordstrom agreed tosign as the project's anchortenant. However, the Business Journal says the crumblingeconomy forced Nordstrom to pull out of the project. The two otherfirst-phase retailers, Macy's and Bloomingdales, have pushed theiropenings back until 2010.

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The article says CityNorth suffered another setback in 2009 whenthe Goldwater Institute tried to overturn the $97.4 million in taxincentives awarded by the city of Phoenix to the project'sdevelopers. The suit is awaiting decision from the Arizona SupremeCourt.

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The developers, however, remain optimistic. "The foreclosurewill result in a restructuring of equity interests in the HighStreet portion of the project to enable fresh capital to beinjected," said Klutznick Co. principal John Klutznick in astatement. "Day-to-day operations will continue as usual andKlutznick Company remains committed to the success of High Street."Klutznick went on to say his company was working on future phasesof the project.

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Read more about the foreclosure here.

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