X Company Set for Legal Showdown Over Phoenix Towers

The fate of the X Phoenix luxury apartment development is set for a legal showdown next week.

The stalled project at 200 West Monroe Street has been the subject of a back-and-forth in court between the Chicago-based X Company and general contractor Clayco. Now, the two parties will determine a path forward at a May 27 hearing, the Phoenix Business Journal reported.

It’s possible the property, which completed one tower in 2022 while a second has remained in limbo, could be headed to foreclosure. In February, Clayco filed a motion for summary judgment against X Company subsidiary XSC Phoenix Investment 2.0 asking the court to “order the Maricopa County Sheriff to execute a sale of XSC’s interest in the property.”

A Maricopa County judge granted Clayco’s summary judgment request on April 9, setting off a chain of filings between Clayco and The X Company — not to be confused with Elon Musk’s X Corporation — to determine just what the summary judgment would entail.

XSC doesn’t appear to be going down without a fight. On May 12, Clayco asked for a time extension to respond to XSC’s opposition to its summary judgment motions; XSC agreed to push that deadline until May 27. The court granted the request on May 21.

Chicago-based Clayco came on board as general contractor for the second tower at The X Company’s 25-story luxury apartment in May 2022. Construction came to a halt in September 2023 after a significant financial shortfall and inability to secure necessary funding and has been stalled ever since.

The X Company stands accused in complaints and mechanic’s liens from contractors of owing nearly $31.6 million for work done at the site and another $8.3 million in interest accrued through Jan. 31.

Clayco chairman Robert Clark explained the issue in the contractor’s February notice of intent to terminate the XSC contract. The X Company allegedly “continues to fail to procure the necessary financing for the past several months” and “advised Clayco it has a $50 million ‘hole’ in its financing [and] capital stack and no prospects of closing this significant gap except at the expense of Clayco and its subcontractors.”

For now, the downtown Phoenix property will remain in limbo.

— Chris Malone Méndez