A decade of planning and a year of construction came to a halt at the end of last month when the Nakoma Sky Board of Trustees determined its Oro Valley project was no longer viable.
Board Chair Jane Lateer and Nakoma Sky CEO Lisa Israel stated in a press release to stakeholders that The Nakoma Sky Board of Trustees and senior management team had come to the “very difficult conclusion that the Nakoma Sky project cannot be built any time in the foreseeable future.”
Major issues cited in the press release were severe local and national workforce shortages, the rapidly increasing costs of construction materials due to the threat of tariffs and supply shortages. According to Nakoma Sky, the circumstances were beyond its control and “not foreseeable.”
“We know that the new tariffs are affecting prices and causing difficulties,” said chief operating officer Joni Condit. “It’s creating a lot of uncertainty in the market. Contractors couldn’t give us a schedule and couldn’t guarantee pricing. But for a project of this size, you need a guaranteed schedule and price.”
Nakoma Sky was slated for construction on 77 acres of desert wilderness just off of North Oracle Road, at the corner of West Naranja Drive and North First Avenue. Preliminary construction stripped the plot of vegetation, leaving behind a vacant dirt plain.
Now that the project is cancelled, some Oro Valley residents are curious what will become of the land, and if the ecosystem was cleared for seemingly no reason.
“We haven’t decided what to do with the land,” Condit said. “The land is a great spot in Oro Valley, and the price has gone up. We could sell it, or we could wait and see if things change for us.”
Oro Valley Town Manager Mary Jacobs told the Town Council in official communications that staff were disappointed to learn that Nakoma Sky LLC was unable find success at the site. According to Jacobs, town staff is working with project engineers to identify any immediate measures that need to be taken in order to stabilize the site while the property owner considers other options.
The Nakoma Sky project is owned by the La Posada senior living community in Green Valley, and was planned to be its second campus. With construction originally planned to finish at the end of 2019, Nakoma Sky was expected to house upwards of 400 residents.
Future residents already reserved around 95 percent of the apartments. Reservation deposits for Nakoma Sky homes were generally 10 percent of the value of the entrance fee, and these entrance fees ranged from 20 to 80,000 dollars. All depositors will receive their money back, plus accrued interest.
“This cancellation was certainly not for lack of interest,” Condit said. “It’s very unfortunate. Right now we’re still in the process of figuring things out.”
The current construction labor shortage is in Phoenix as well as Tucson. Arizona’s construction industry lost over half of its jobs during the recession and is still recovering. A majority of local contractors say they have difficulty filling hourly construction jobs, according to a study from the Associated General Contractors of America. Nakoma Sky would have been able to work through these shortages, if not also coupled with new tariffs and supply shortages.
“Our project is no longer feasible to construct under today’s conditions,” Israel said in a press release. “This is one of the most difficult situations our organization has faced in its 31 years of business.”