Flaxman’s plea deal won’t impede development, owner of City North property says

The plea agreement made by Robert Flaxman will not affect Crown Realty & Development’s plans to move forward on its recently acquired 96.5-acre parcel in the Desert Ridge area, company officials say.

In January, an affiliate of Crown Realty & Development acquired a core parcel in the coveted City North and Desert Ridge “Master Developer” rights in north Phoenix.

Robert Flaxman

In March, company executive Robert Flaxman was named in the college admissions investigation.

Mr. Flaxman’s plea agreement entered into with the U.S. Attorney was made public on April 8, according to a press release.

Due to Mr. Flaxman’s early plea agreement and cooperation, the U.S. Attorney has recommended sentencing at the low end of the guidelines. Sentencing will not occur until later this year, at the earliest, the press release stated.

In a statement expressing his gratitude to his family, friends and business partners, Mr. Flaxman says he regrets the mistakes he has made.

“I want to express my deep, heartfelt gratitude to my family, friends, and business partners for their extraordinary and unwavering support during this difficult time. I am grateful to each and every one of them. To my children especially, thank you for your love and understanding, and above all, strength to persevere through this all,” Mr. Flaxman said in a prepared statement.

“I deeply regret the mistakes that I have made. They are my own, and I take full responsibility for my actions. I am very pleased to have reached an agreement regarding the resolution of my case with the U.S. Attorney’s Office. As this is an ongoing legal proceeding, I will have no further comment on the matter.”

While Mr. Flaxman’s involvement in the investigation has made national and state news, it does not affect Crown Realty & Development’s ambitious plans to proceed to meet the pent up demand for real estate activity at City North, according to Rick Carpinelli, Senior Vice President of Property Acquisition & Residential Development.

Mr. Carpinelli has been with the company for almost 15 years, leading Arizona operations.

“Since resolving the bankruptcy and litigation uncertainty this year, the response from major office, retail, multifamily and hotel developers has been extraordinary,” said Mr. Carpinelli in a prepared statement.

The company’s plans to commence major infrastructure investments this spring remain on track, the press release stated. The company has already announced several national brokerage teams to assist with various aspects of the large mixed use development.

Rick Carpinelli

Discussions are ongoing with prominent companies for new corporate headquarters and restaurants among others, Mr. Carpinelli said.

He also said that while Mr. Flaxman’s involvement in the college admissions matter has drawn attention to the company, the company is replete with key personnel who will ensure uninterrupted operations.

“Let me be clear. Robert has been integral to the company’s substantial success but we also have many others. He has issued a statement on his matter and justice will now run its course. Meanwhile, we will be hard at work delivering a terrific new mix of uses for our neighbors, the

City of Phoenix and state of Arizona,” Mr. Carpinelli said in the statement.

He noted that with the large amount of state land in the Desert Ridge area, its role as “Master Developer” is strategically important to Arizona’s economic development and education initiatives.

“Those who have held these rights in the past have not always been cooperative, collaborative partners with Phoenix or the state. We are and will be,” Mr. Carpinelli said.

With its increased activity in the Phoenix market, Mr. Carpinelli said the company would soon be announcing new hires, including at the senior level, to facilitate all of the activity expected over the years to come. It is also worth noting, said Mr. Carpinelli, that the company has no debt on this project and has and will continue to finance its capital needs without debt.

“It’s one of the most significant pieces of undeveloped land in Arizona, if not the most. We are giving this opportunity the attention and capital it deserves and won’t be distracted by recent news and events,” Mr. Carpinelli said.

News Editor Melissa Rosequist can be reached by e-mail at mrosequist@newszap.com or follow her on Twitter at www.twitter.com/Mrosequist_

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