Judge Rules Developer Breached Phoenix Apartment Contract

A Maricopa County judge found XSC Phoenix Investment 2.0 LLC materially breached its contract with general contractor Clayco Inc. over a stalled downtown tower.

Updated on Nov. 5, 2026 in Construction

Bold flat-color editorial illustration of an unfinished concrete building frame with an idle crane against a pale sky, evoking a stalled construction project. — Maricopa County Judge John L. Blanchard ruled Tuesday that XSC Phoenix Investment 2.0 LLC breached its contract with Clayco Inc., leaving $40.3 million owed over a downtown tower stalled since 2023. AI Illustration. Upload story photo >

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Maricopa County Superior Court Judge John L. Blanchard issued a final judgment on November 2, 2026, finding XSC Phoenix Investment 2.0 LLC violated the Arizona Prompt Payment Act and breached its contract with Clayco Inc. The dispute concerns the second phase of the X Phoenix apartment complex at West Monroe and 3rd Avenue downtown, where construction stopped mid-build in September 2023.

Why it matters

The ruling establishes that Clayco Inc. and subcontractors are owed $40.3 million in principal plus accrued interest for work on a project that has sat unfinished for more than three years. It signals the financial exposure facing contractors and subcontractors when developers stop payment on large downtown Phoenix projects.

The court calculated $40.3 million in unpaid principal and $16.3 million in accrued interest owed to Clayco Inc. and subcontractors, with interest rising 1.5% per month after June 30 until paid. Whether the developer will pay the judgment or contest it further was not addressed in the available record.

The players

Clayco Inc.

Clayco Inc. is a Chicago-headquartered design-build and construction firm that served as general contractor on the X Phoenix project.

XSC Phoenix Investment 2.0 LLC

XSC Phoenix Investment 2.0 LLC is the developer entity that owns and commissioned the second phase of the X Phoenix apartment tower.

The details

Judge John L. Blanchard found that XSC Phoenix Investment 2.0 LLC materially breached its contract with general contractor Clayco Inc. for building the second phase of the X Phoenix apartment complex. Construction halted mid-project in September 2023 and has remained stalled since.

September 2023: Construction on the second phase of the X Phoenix apartment complex stopped mid-construction.
November 2, 2026: Judge Blanchard issued the final judgment.
June 30: Date through which accrued interest of $16.3 million is calculated.

Market Landscape

The judgment applies the Arizona Prompt Payment Act to a large downtown Phoenix development, reinforcing the statute's role in protecting contractors and subcontractors when developers withhold payment. The case shows how prompt-payment enforcement can operate even when a project has stalled for years.

Subcontractors and suppliers on large Phoenix projects may face delayed payments when developers stop funding work, and the judgment's accruing 1.5% monthly interest shows how quickly unpaid balances can grow. Residents and tenants waiting on the X Phoenix tower have no completion date, since the stub records no revised schedule.

The takeaway

Contract disputes over stalled construction can leave contractors owed large sums for years, so project payment terms and prompt-payment protections matter for every party on a build.