Unanimous Maricopa Jury Awards Gray Development A Landmark $110,658,800 Verdict Against Desert Ridge Master Developer

PHOENIX, July 27 /PRNewswire/ -- Following a six-week trial, on July 27, 2010, a unanimous ten-member Maricopa County jury awarded a landmark $110,658,800 verdict to the Gray Development Group against Northeast Phoenix Partners – the master developer of Desert Ridge and the Chicago-based developer of the financially troubled CityNorth project at Desert Ridge.  The case concerned Gray's attempts to develop a 41-acre parcel located in Desert Ridge on Deer Valley Road directly across the street from the Desert Ridge Marketplace and the CityNorth development.  Gray acquired the parcel for $32 million in 2004 at a state auction.  Gray presented evidence at trial proving that Northeast Phoenix Partners, an entity controlled by the Thomas J. Klutznick Company of Chicago, abused its powers as Master Developer to block Gray's development efforts between 2004 and 2007 in order to protect its neighboring CityNorth development.

The trial evidence included:

• Documents showing that the Klutznick organization leveraged its close relationship with Phoenix City Councilwoman Peggy Neely to block Gray's zoning case.  Councilwoman Neely was a vocal supporter of the Klutznicks' controversial $97.4 million City sales tax rebate for the CityNorth project.
• Documents showing that the Klutznicks orchestrated a behind-the-scenes campaign to drum up community opposition to Gray's apartment project.
• Documents showing that the Klutznicks abused their complete control over the Desert Ridge Community Association to benefit their CityNorth project.

Bruce Gray, the Chairman of Gray Development Group, said, "I have known for six years now that I had a legal right to build my apartments in Desert Ridge and that the Klutznick organization was denying me that basic right.  For years, they have made decisions at Desert Ridge that harm the community, harm local developers, and benefit their private CityNorth project.  This circumstance must end.  It took over three years to present our case to a jury of Maricopa County residents.  I am personally gratified that today an Arizona jury has unanimously confirmed what I've known all along, finding in our favor on all counts."

Gray's lead trial counsel, Michael Kibler of Simpson Thacher & Bartlett, who tried the case with his partner Barry Ostrager, said, "This case was extremely hard fought; the jury attentively sat through six weeks of testimony and waded through dozens of complex documents.  But in the end, the case, like most cases, boiled down to right versus wrong.  Bruce Gray had the right to build his apartments at Desert Ridge and the Klutznick organization was wrong to deny Gray his right.  We are highly confident that the verdict will withstand any appeals."

ABOUT GRAY DEVELOPMENT GROUP

Gray Development Group is a fully integrated real estate company focused on creating innovative urban multi-family residential communities. The talented real estate professionals of Gray Development Group provide considerable expertise in the areas of: Real Estate Development, Construction Management, Asset Management, Property Management, Architectural Design and Land Planning.  Find out more about Gray Development Group at www.graydevelopment.com.

ABOUT SIMPSON THACHER & BARTLETT LLP

Simpson Thacher & Bartlett LLP (www.simpsonthacher.com) is one of the world's leading international law firms. The Firm was established in 1884 and has more than 800 lawyers. Headquartered in New York with offices in Beijing, Hong Kong, London, Los Angeles, Palo Alto, Sao Paulo, Tokyo, and Washington, D.C., the Firm provides coordinated legal advice and transactional capability to clients around the globe.

SOURCE Gray Development Group