Lender files foreclosure papers on CityNorth

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PHOENIX -- After overcoming a variety of legal challenges, the controversial CityNorth project is facing what could be Arizona's largest commercial foreclosure ever.

The 144-acre development at the corner of 56th Street and Deer Valley Road was supposed to bring upscale shopping to the Loop 101 corridor, but several big-name stores, including Bloomingdale's and Nordstrom, have scrapped plans to build -- at least until the economy improves.

Because of that, construction has been completed on only one of the project's three phases -- High Street.

Now the lender, Chicago-based Capmark Finance, has filed foreclosure papers on the development. According to a document filed with the Maricopa County Recorder's Office, a foreclosure auction has been scheduled for March 31.

The developers of CityNorth reportedly owe Capmark, formerly known as GMAC COmmercial, nearly $300 million.