Client:

Brookfield Communities, Inc. and affiliate 89 & Vine Arizona Partners, LLC. Brookfield is a homebuilder of master planned communities and homes with locations near Sedona/Cottonwood and Bullhead City, Arizona, with a focus on active adult communities.

Project:

The project is a 700-acre, master-planned luxury community to be located in Cottonwood, Arizona and developed around an Arizona vineyard concept. Core elements in the 89 & Vine experience include a significant wine tasting center, town center and working vineyards. The project incorporates the vineyard concept throughout and will help accelerate the sale of 1,400 homes and substantial commercial property.

Challenge:

The challenges facing our client included the following:

• Option Purchase Agreement: Negotiation of an option purchase agreement for over 460 acres of single-family residential property, which would be purchased and developed in phases over the next 10 years. The agreement needed to include take-down schedules, release prices and release procedures for individual lots, the division of development costs and anticipation of required coordination with governmental units and the city in order to develop the project as a whole.
• Land Use & Zoning Issues: Strategic approach to anticipated access, easement and utility issues for each of the parcels and parcel types and coordination of future requirements and cooperation among various owners.
• Development Flexibility: Establishment of an agreement regarding the accommodation of changing development plans, which might include product diversity and the development of property amenities, such as a clubhouse.
• Title Insurance Coverage: Ensure continuous and satisfactory title insurance coverage for the option properties now and in the future as each property is purchased according to the agreement; coverage had to address escalating values and allocation of these and other potential seller-purchaser title encumbrances.

Solution:

Perkins Coie has served as primary counsel on this project since its early negotiation stage. We organized meetings to preliminarily shape and then honed the issues for discussion and agreement. We went on to guide the parties’ focus on development issues, a necessary component for the long-term success of the project.

To address the option purchase agreement challenge, we successfully drafted, negotiated and finalized an agreement for the single-family residential property that included all the areas critical to protect our clients. Perkins Coie also promulgated a plan, agreed upon by the title company and seller, for satisfactory title insurance coverage on all parcels, including future take-down parcels. The plan also included cost allocation and pre-set values for parcels.

Development will span years, and Perkins Coie attorneys continue to assist Brookfield and 89 & Vine in due diligence, option closings and issues related to development, title and homebuilder sales.