Article originally posted in the Phoenix Business Journal on Nov. 3, 2026.

A Maricopa County judge issued a final judgment that the developer of a long-stalled downtown Phoenix apartment tower “materially breached its contract” with one of the Valley’s most prolific general contractors.

Maricopa County Superior Court⁠ Judge John L. Blanchard found in the Nov. 2 ruling that XSC Phoenix Investment 2.0 LLC, an entity affiliated with Chicago-based developer The X Co., violated the Arizona Prompt Payment Act and breached its contract with general contractor Clayco Inc.⁠ to build the second phase of the X Phoenix apartment complex on the corner of West Monroe and 3rd Avenue, which stopped mid-construction in September 2023.

Chicago-based Clayco Inc., the No. 5 largest general contractor operating in the Valley with $1.21 billion in Arizona billings in 2025, has been embroiled in a legal battle with The X Co. since March 2024.

Clayco and other subcontractors tied to the project are now owed $40.3 million in principal and another $16.3 million in accrued interest through June 30, plus accruing interest at the rate of 1.5% per month thereafter until paid, according to the Nov. 2 judgment.

The judgment adds a sense of finality to a complex legal saga and provides clarity about what happens next with the stalled project.

Announced in 2019, the wider X Phoenix project was envisioned as a luxury “rent by bedroom” development that would offer residents attainable luxury alongside a suite of high-end amenities. The 25-story second phase of X Phoenix was set to feature 592 beds upon completion, complementing the 506-bed, 20-story first phase of the project which is already fully stabilized.

But the second phase hasn’t come to fruition.

Between the first and second phases of X Phoenix, the entire project takes an entire city block, bounded by Van Buren Street to the north, Second Avenue to the east, Monroe Street to the south and 3rd Avenue to the west.

Wider X Phoenix project in peril

The Maricopa County sheriff will now foreclose on the incomplete second phase of the property at 201 W. Van Buren St. Proceeds of that sale will go to Clayco and the subcontractors on the project.

If proceeds exceed the judgment amount, the excess proceeds will be paid to XSC Phoenix Investment. However, if there is a shortfall, Clayco is authorized to try to further execute on the judgment against XSC — essentially pursue other XSC assets to satisfy the remaining outstanding judgment amount.

Clayco also has the right to apply for reasonable attorneys’ fees and costs.

Clayco and X Phoenix did not respond to a request for comment.

The X Co. secured a Government Property Lease Excise Tax, or GPLET, through the city of Phoenix to abate property taxes while the X Phoenix project was under construction. That means the city owns both phases of X Phoenix, Christine Mackay, former economic development director for the city of Phoenix, told the Business Journal in March 2024.