City Reaches Landmark Settlement with Hyatt in Ongoing Eminent Domain Battle

The city of Sedona has reached a settlement in the third of five eminent domain lawsuits involving property owners affected by the Forest Road Extension project. The Sedona City Council approved this agreement with the Forest Road Condominium Association (FRCA), operating as the Hyatt Residence Club, during a meeting on July 9, without engaging in any discussion.

The Forest Road extension plans necessitated the city acquire right-of-way or easements across 11 parcels owned by nine distinct owners. Initially, four property owners accepted compensation for five parcels. However, five landowners contested the proposed compensation, prompting the city to initiate condemnation proceedings in Coconino County Superior Court.

The first lawsuit concluded on January 12, 2023, when Jean McDonald, owner of 731 Forest Road, settled for $256,000, significantly higher than the original offer of $110,565. Subsequently, a second agreement with Stephanie and M.S. Penman of 760 Forest Road was finalized on October 24, 2023. City officials had initially offered the Penmans $241,128 for the right-of-way but ultimately resolved the dispute by trading them half of an adjacent parcel valued at $839,500.

The city’s first offer to FRCA for the right-of-way was $223,299; however, FRCA countered with a claim for $1,467,298. Following mediation in November, a settlement was reached at $450,000. According to the council’s July 9 agenda, the city has deposited $241,128 with the Coconino Superior Court, requiring an additional $208,872 to finalize the acquisition. As part of this settlement, FRCA will be permitted to construct four private gates on their property and provide gated access to 58 parking spaces for employees at the Shops at Piñon Point.

To date, Sedona has disbursed a total of $1,125,750 to the three owners with whom it has settled, a figure that exceeds their original estimate of $574,992 for easements on these properties by 96%. The projected cost for the entire Forest Road extension project has ballooned to $15,446,907.73, an increase from $2,772,047 in May 2019.

Ongoing litigation is still in progress regarding claims from the Bowers family, who own 741 Forest Road, and Dr. Farshid Paydar.