Arizona Jury Finds ZOM Living Guilty of Breach of Contract

A national multifamily developer’s expansion into Arizona will cost it $323 million.

A Maricopa County jury found Orlando-based ZOM Living liable for breaching its agreement with Gray Development Group after allegedly using the local developer’s pipeline, market intel and relationships to launch its first projects in the Grand Canyon State, Bisnow reported.

ZOM was ordered to pay $323 million in damages to the now-defunct developer. Gray accused ZOM of freezing it out after months of extracting proprietary information tied to a planned $1.4 billion development pipeline. ZOM did not comment on the ruling.

The dispute dates back to 2019, when Arizona-based Gray invited ZOM into a joint venture involving five multifamily projects.

The two firms signed confidentiality agreements, but Gray allegedly shared financial data, market studies, planning strategies and local relationships it had built over three decades in the state. According to the lawsuit, ZOM spent the next 10 months pressing Gray for additional information before sidelining the firm and moving ahead on the projects alone, breaching the contract between the two companies.

Gray shut down in 2020 but argued in court that ZOM’s entire Arizona footprint stemmed from projects Gray assembled before joining forces with ZOM.

The projects at the center of the case include four apartment developments in Phoenix and Scottsdale, all of which started construction last year and are slated for completion next year. A ZOM affiliate acquired the 33 acres of land through U.S. Bankruptcy Court proceedings in 2021.

Among the developments is Mezzo Desert Ridge, a 416-unit luxury project near Taiwan Semiconductor Manufacturing Company’s massive campus in north Phoenix. That project secured $88 million in construction financing from Origin. ZOM is also developing the 341-unit Maizon project in Phoenix’s Biltmore neighborhood, the 362-unit Hazel in Old Town Scottsdale and Azure, a 170-unit luxury project in Scottsdale’s Waterfront District.— Chris Malone Méndez